DAX Report: Top company positions see low demand for newcomers

The executive boards of companies listed on the German Stock Index (DAX) are now more female and more international than in the past - yet old career patterns still dominate in the top management. 

This can be seen above all in the uniform corporate and industry backgrounds of the current members of the Executive Board. Industry knowledge for the management board in a DAX Group is still important today, as shown by the current DAX Executive Board Report, where the international recruitment consultants Odgers Berndtson examined for the eighth time the profiles of all board members in the DAX.

The proportion of board members who had already spent more than half of their careers in the company before their appointment - so-called "home-grown" companies - rose to more than 58 percent in 2019. For the CEOs in the DAX, this ratio is even higher: 80 percent of the CEOs are recruited from internal positions. Although the proportion of self-employed people in the Executive Board committees temporarily dropped below the 50 percent mark in the financial crisis at the end of the 2000s, it has risen steadily over the past ten years. 

"When filling senior management positions, in most cases a candidate from within your own company is preferred," explains Klaus Hansen, Partner, and Head of the Board & Chair and CEO at Odgers Berndtson.

The industry affiliation of a prospective member of the DAX Executive Board continues to be given high priority: 80 percent of the current members of the Executive Board have spent most of their careers within the same industry, and 89 percent of the newly appointed Executive Board members in 2019. For the 30 DAX CEOs, industry knowledge is a very special must: 83 percent of them are industry insiders - in previous years, their share was over 90 percent. 

"In view of the increasingly disruptive environment of companies, this lack of courage in 'out-of-the-box thinking' is astonishing," Klaus Hansen comments on the low proportion of newcomers. "The convergence of the industries is already visible to the naked eye, and we stand here only at the beginning of a revolution."

Women come more often from the outside

Comparing the CVs of male and female board members in the DAX shows that women are more likely to come from outside the company than men. While the "self-growth rate" for men is 61 percent, women-only reaches around 39 percent. In terms of industry affiliation, their share of 68 percent is also significantly lower than that of men (82 percent). As a rule, female board members bring more experience and thus new perspectives from other companies. 

"This is a step in the right direction," says Hansen, adding: "It would be desirable, however, that diversity in the largest German companies are not just reduced to gender or skin color, but also to what is happening with our best minds."

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