Predicting CEO Success: When Potential Outperforms Experience

Spencer Stuart

Demand for prior CEO experience has quadrupled since the turn of the century. Since 1997, the share of S&P 500 CEOs with prior experience has grown from 4% to 16%.1 When we asked 50 seasoned directors about the finding, they considered the ability to increase shareholder value a primary benefit of experience. Such an assumption seems intuitive at first, and we often see it shape CEO selection processes, but what if the logic is flawed?

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