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Rise in the number of foreign CFOs at FTSE 100 companies

The number of UK-nationals in CFO positions in FTSE 100 companies has fallen in the last 15 years, with foreign CEOs also on the increase

Almost 30% of FTSE 100 CFOs are non-UK nationals, according to a new report.

The number of UK-nationals in CFO positions in FTSE 100 companies fell from 92% in 2001 to 71% in 2016.

Nationalities of CEOs in FTSE 100 companies saw an even bigger change, with 40% found to be non-UK nationals, almost double the level in 2001 (21%), one of the most recent being the appointment of South African-born Jan du Plessis as BT chairman.

This rise in non-UK leadership is partly explained by a five-fold increase in FTSE 100 companies based outside of the UK since 2001, explains the report by Odgers Berndtson, with companies headquartered in nine different countries, significantly ahead of non-national representation on other international exchanges.

Amid great interest in the consequences of Brexit and as the UK prepares to withdraw from Europe, the findings from Global Corporate Leadership Barometer highlight the extent to which the UK’s biggest companies have become more dependent on top executives originating outside of the UK.

But while Britain’s top companies have embraced leaders from overseas at an accelerating rate, the analysis reveals a lack of UK representation in senior roles at FTSE 100 companies headquartered abroad.

Of the 15 FTSE 100 companies currently headquartered overseas, eight do not have a CEO, Chair or CFO of UK origin. In fact, only 1 in 15 CEO roles held at FTSE 100 companies currently headquartered abroad are held by UK nationals

It also revealed that while more international business leaders have come to the UK, there is little or no evidence of a significant rise in executives of UK origin heading international companies based outside the UK.

At the end of 2016, for example, there was only one UK-born chief executive found across all the companies combined that were analysed and quoted on the German DAX, French CAC-40 and Dutch AEX.

The findings also showed that banks, insurance and financial services accounted for 19% of FTSE 100 companies in 2001, all but four with UK-born chief executives. By 2016 the sector still accounted for 19% of the FTSE 100 but the number of UK-born CEOs fell from 15 to 12 and non-UK national CEOs rose from 4 to 7.

These numbers make the UK one of the most internationally diverse centres in the world for companies and business leaders. At CEO level, no other leading exchange analysed has more than a third of non-nationals, whilst in some exchanges, over 90% of those chief executives with origin data available are native.

Due to London’s high standards of corporate governance and access to world-class business, financial and professional services, the UK benefits disproportionately from international corporations. FTSE 100 companies reportedly generate over three quarters of their revenues overseas, benefiting the UK and generating local employment and economic gains.

A key question and concern for 2017 is the extent to which this can be sustained.

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