Canadian CEOs fall short in overseas experience, study finds
The Globe and Mail
By Richard Blackwell
Canadian executives have far less international experience than corporate top brass in Australia, one of our key global rivals, leaving this country at a potential disadvantage in world markets.
According to a study to be released Tuesday by headhunters Russell Reynolds Associates, about 37 per cent of Canadian chief executive officers had at least one year of international work experience before they got the top job at their firms, compared with a dramatically higher 67 per cent of Australian CEOs.
Unless this gap is closed “our ability to compete on the world stage will become stagnant or perhaps even decline,” said Russell Reynolds’ Canadian country manager, Shawn Cooper. That could be a disaster at a time when economic power is spreading to new players around the globe, he said.
The study compared Australia and Canada because the two countries have similar-sized economies, a comparable mix of industries, and both recognize that international trade is crucial to their growth.
Indeed, when board members of large public companies in both countries were interviewed, similar proportions – more than 75 per cent – suggested that international experience was important. But the Australians are more successful in attracting executives who have worked outside the country, the study found.
One difference is that Australian companies find it easier to entice expatriate executives to return home. The geographic isolation of Australia means many executives working elsewhere want to come home eventually, while Canadian executives can easily live and work in the United States and remain close to home, the study said.
Another difference, the study suggested, is that Canadian companies think their executives can get what amounts to international exposure in North American markets without leaving the country, because of our proximity to the United States. Australian executives, by contrast, must actually leave that country to get international experience.
For Canada, the attitude that an executive can get global exposure while living at home is no longer good enough, said Jon Martin, a managing director in Russell Reynolds’ Toronto office. “Actually living and working in a market outside your own country is far and away the best way to gain that international orientation and competence.”
Boards of companies with international operations must make sure executives at various levels are encouraged to – or even required to – spend time overseas, Mr. Martin said. And they should also consider “importing” executives from other countries, he added.
Mr. Cooper said an executive’s international experience is important not just because it will help a company exploit new markets for its products. Many companies also want access to new financial and labour markets overseas, while foreign-based companies are coming to Canada to compete. In addition, domestic companies are increasing getting materials and components for their products from overseas. “Globalization hits on a number of fronts,” he said.
And if a company wants to do business in countries such as China or India, it will likely have to enter through a joint venture, Mr. Cooper said. “That is a whole different world for most corporate executives, and this is why you want people with [foreign] experience on the executive team.”
The Russell Reynolds study meshes with a recent report from the Institute for Competitiveness and Prosperity at the University of Toronto, which said Canadian firms need to boost ties in both advanced countries and emerging markets. Expanding trade with other countries increases competition and innovation, the report said.
