Bosses at US companies are getting older, posing a risk to some IR teams
I’m sure many of our readers are very tied up in preparing for, conducting or dealing with the endless follow-up to their earnings announcements this week – but, for those that aren’t, I can recommend some weighty academic reading.
A recently published working paper by the National Bureau of Economic Research (NBER) reveals something that many have observed anecdotally: that the age of those holding CEO positions at the US’s largest companies are getting older.
In fact, based on data collected between 2000 and 2023, the average age of US CEOs has increased by 10 years up to 61 – five times the increase in the average member of the college-educated labor force. A similar trend has been recorded in Europe, too.
When it comes to the age of CEOs appointed in 2025, there was a slight drop however, to 54.4 years, down from 55.8 years in 2024.
The authors of the study, the findings of which you can access in full here, suggest that the increasing age of those holding CEO roles also coincides with a disinclination for sitting bosses to free up positions for their Gen X juniors, which may mean that younger professionals end up leapfrogging them for the top seats when the jobs finally open up.
The age that CEOs ascend to their post has also extended, from an average of 48 years in 2000 to 55 years in 2023. But as NBER’s authors write, this ‘aging trend is unlikely to arise solely from longer tenures, later retirement, or CEO entrenchment’ and instead represents a broad ‘upward shift’ across the capital markets.
One key factor, says NBER, is that the recurrence of familiar, macroeconomic shocks throughout the economy over the past two decades mean that firms are looking for CEOs who have experience of overcoming the broadest range of existential threats possible.
‘Today’s CEOs have held a larger number of positions across more firms and industries than their counterparts in 2000,’ the report says. ‘CEOs’ employment histories have become longer, leading to the increased age of CEOs upon appointment.’
The finding has deep implications for IROs – and governance professionals – who might want to consider the thorny issue of succession planning in more detail.
Understanding the kind of expertise that your new CEO may need to have is key and being able to communicate around changes in direction is also critical to ensure a smooth transition to the next boss.
But it also means that IROs who have one eye on an eventual role in the C-suite may need to rethink their strategy to get there. For many of our readers, the CFO chair may represent a more stable stepping-stone, but the CEO role offers a more intriguing challenge.
I’m reminded of the words that Lorne Gorber, a leading Canadian IRO who recently passed away, wrote for us back in 2021. He used a wonderful German word – Fingerspitzengeful – that he characterised as ‘a set of intangible traits that include tact, diplomacy, sensitivity and empathy, all wrapped in a sort of flair that takes years of experience to develop’ to refer to the unique quality that IROs can bring into a leadership role.
‘You can read two things into this: the first is that you don’t need Fingerspitzengeful to succeed, but with it you are more memorable and impactful,’ he wrote. ‘The second is that people don’t work for companies – people work for leaders. Everyone is attracted to Fingerspitzengeful. Go get yours.’
Good advice for IR hopefuls waiting in the wings.
