Coca-Cola directors have reportedly launched the company's
first-ever outside search for a CEO. But the soda king may want to
stick to its old formula of hiring from within. A study released
last week by Burson-Marsteller says that business influencers
believe that companies are better off hiring insider CEOs than
outsider CEOs for long-term business success (47% versus 33%) while
20% were unsure or don't know. The study, titled "Building CEO
Capital," polled 1,040 business influencers -- CEOs, senior
executives, financial analysts/institutional investors, business
media, board members and government officials.
"There are some well-formed perceptions about how insiders are
likely to be perceived as more stable [than outsider CEOs]," says
Patrick Ford, chair of Burson's U.S. Corporate Practice. "They have
a head start and have developed well-established loyalties among
senior managers, which is essential to success." The study on CEO
succession found that nearly all of the influencers surveyed agree
that if a company selects an outsider CEO, it is best to choose
from within the industry (30%) than from outside (3%). While the
debate heats up about insider versus outsider CEOs, a separate
Burson study shows that the proportion of insider to outsider CEOs
has remained relatively stable in the last five years among Fortune
1000 companies: 63% insider CEOs compared with 37% outsider CEOs.
The handicapping of "insider" versus "outsider" CEOs is part of a
new quarterly CEO tracking system by Burson and executive
management consulting firm RHR International.