New research shows CEOs are becoming older while the teams they lead are getting younger
Business leaders are getting older, according to a new Australian study, with one of the co-authors warning this could create problems for companies who don't encourage a diversity of ages in leadership positions.
“The risk of a greater culture divide is present,” Associate Professor at University of Western Australia, Sebastiaan Van Doorn, told HRD. “Generations have different priorities and views on work-related matters, which can create misalignment across the organisation. That can cause problems.”
The report, co-authored by Dr Pitosh Heyden of Monash University and Dr Heidi Wechtler of the University of Newcastle, looked at the age profiles of chief executive officer succession episodes and found those that are succeeding leaders are growing older in age.
"Counter to the trend of the general workforce becoming more age-diverse, executives appear to have become more age homogenous and increasingly older at appointment," the report found.
Van Doorn noted the older age of CEOs wasn't uncommon because of the skills and experience needed to be a successful leader – but finds the rise in age, and lack of age diversity, could have an impact.
“Ideas, managing change and social uncertainty, and adopting new technology – these are all things that the older generation, traditionally, are less likely to accept. You’re putting yourself at a potential disadvantage – and the fix isn’t necessarily easy.”
“Those that succeed CEOs were generally between 50 and 70 – but now we’re seeing that creep to 60 upwards now."
Van Doorn said this could be problematic if it led to limited promotion opportunities and talented team members being stuck in middle management roles.
He emphasised the importance of investing in employees and developing their leadership capabilities to bring the age of the executive suite down and future-proof it.
“You’ve got an environment where people are more likely to job-hop, why not invest in them and give them the ability to be promoted in-house? Managing their talent over time and being transparent with them is more likely going to mean they stay – creating more engaged managers for the future which can also adapt to an ever-changing technological landscape.”
With millennials (those born between 1981 and 1996) expected to make up 75% of the Australian workforce by 2025 and growing numbers of Gen Z workers, the potential disconnect between them and the C-Suite becomes more probable, according to Van Doorn. Citing the need to “rejuvenate,” he told HRD that businesses’ abilities to adapt will define their competitive advantage.
“Those that do [rejuvenate], typically, perform better in terms of innovation output. Investing in your talent from the very beginning is very important – because companies that innovate are going to be more active in things like international mergers and acquisitions. Firms that don’t adjust will struggle.”
“We don’t have a good enough understanding yet of how we rejuvenate the upper echelons of companies, but I think we’re at a critical point because if the age of leaders keeps going up – there’s going to be an even greater divide and potential regression of those that don’t look ahead,” Van Doorn warned HRD.
Gen Z are fundamentally changing the way businesses operate – and this could be the key to unlocking the next generation of potential leaders, Van Doorn noted.
Figures from Russell Reynolds, show the percentage of incoming CEOs growing from Q4 in 2024 to Q1 in 2025.
“It’s a worry business will have to deal with. A lot of firms react to this environmental turmoil by choosing for a very reliable, seasoned leader that they think can weather that storm. It might be that by taking up such a risk averse approach, they achieve the opposite, and they will lag behind,” Van Doorn highlighted to HRD.
He added that the safe option is not always the right one – especially when considering rapid technological change, such as the adoption of AI.
The report, titled Wrinkle of change? The reproduction of executive age profiles across CEO succession episodes, also found the tenure of S&P500 company CEOs is reducing – from around eight years to around four or five.
This, Van Doorn warned, also comes with its own problems.
“This is a worry change,” Van Doorn warned, “because that affects innovation trajectories that could well outlive your time at a company. It also affects how our leaders lead – because you could be managing change every half decade, which isn’t ideal.”
