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Burnt out at 50

23 April 2019

A chief executive of a fairly large company announced his plan to depart earlier this spring and commented that he felt he only had one more big job in him. Nothing exceptional in that you might think, apart from the fact that the person concerned was just 45.

A chief executive of a fairly large company announced his plan to depart earlier this spring and commented that he felt he only had one more big job in him. Nothing exceptional in that you might think, apart from the fact that the person concerned was just 45.

One would hope that a talented executive of 45 would have more than one big job left in him or her. Most chief executives in large companies stick around for about five years, so they would still only be 50 when finishing their next job and presumably contemplating retirement – or at least ceasing to be a senior executive.

Interestingly, an executive turned head-hunter recently said he was surprised when he came in to that line of business, at how ageist British companies are. It is not something he had expected before going into the executive recruitment business, but he quickly learned that British companies do not like old people at the helm. 

Back in the 1960s and 1970s, it was commonplace to have people working well into their 70s. For example, Henry Grunfeld, who was Sigmund Warburg’s lifelong partner in the eponymous bank, held his position till he died aged 96. Arguably, the Lehman collapse was a result of a city run by people in their 40s; none had seen a financial crisis before and had no idea how to react.

Perhaps the importance of the big professional firms has something to do with it. The major law firms, for example, have very few partners who stay on after 50. One firm had a rule that partners over 50 had to make the business case to their colleagues as to why they should be allowed
to stay on after that age. Their younger colleagues, looking at the partner’s client list and seeing the fees which would decant to them if he were to leave, tended to be hard to convince. Accounting firms may be slightly less brutal but investment banks go firmly the other way; they may have people with grey hair in their upper ranks but it has usually been brought on by stress rather than age. In all these firms, there seems to be an assumption that if you have been doing your job properly and earning as much for yourself and the firm as you should have been, then by 50 you will be burnt out.

This tends not to be the way we see ourselves but there may be something in it. In the US, there are examples of people running businesses long after a normal retirement age in this country. At age 83, Warren Buffett is an obvious example – though admittedly he is atypical. Hank Greenberg, who presided at insurance giant AIG for more than 40 years, until he was ousted when he was 80
following a governance scandal, has carried on working. At the age of 88, he is now building a new business known as Starr. Corporate activist Carl Icahn seems to have as much appetite for stirring things up now at age 78 as he did 30 years ago when he made his name.

We have no one in this country to rival that sort of business longevity. It is interesting that Ian MacGregor, appointed by the then Prime Minister Margaret Thatcher to run British Steel in 1980 and then moved by her to the coal industry when in his 70s, had no rival before or since at such a senior level in age terms. It is also significant that although Scottish by birth, his career was forged largely in the US and it was from there that he was recruited.

The point of this, is that there is clearly a shortage of good executives and non-executive directors and given how the demographics are working it is likely to get worse. Meanwhile, many companies still expect their top people to retire at 60 and the corporate governance codes, which restrict non-executives to nine years, tend to push people out in their mid to late 60s. Yet many people today are staying fitter and mentally alert for longer and could surely continue to perform a role and if they were encouraged to, which would considerably enlarge the pool of talent. All it needs is a change of attitude.

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