Chief Executives from 1960-1989: A Trend toward Professionalization

Article excerpt

There has been a long-standing debate whether the field of Management is deserving of professional status, rather than simply status as an occupation. Critics claim that the absence of a required educational background and a professional organization with its own code of ethics are what keep management from joining established professions such as medicine and law. Rather than the study management as a field, this paper studies its participants, 1070 different Chief Executive Officers from 247 companies across thirty years (1960-1989) to determine whether their demographic characteristics have changed over time in a manner reflecting professionalization of the field. Changes in CEO characteristics documenting increased reliance on human capital and decreased reliance social capital, as well as greater job mobility suggest the field of Chief Executive has become more professionalized over the course of the study.

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There has been a longstanding debate whether or not business executives, most notably Chief Executive Officers (CEOs), populate an occupation worthy of the status of professions, the apex of the occupational hierarchy. On one side, the demands and importance of the position, as well as the prestige and remuneration of CEOs justify their place in society's highest strata, not just for the individuals, but also for their occupation. On the other side is a branch of sociology, oftentimes referred to as occupational theory, that more systematically defines professions, and to several key theorists, (Moore, 1970; Goode, 1969; Abbott, 1988) chief executives fail to qualify as a profession under their definitions. They cite there is not a prescribed educational requirement, or a self-governing association that credentials and monitors its members, much like the American Bar Association does for attorneys and the American Medical Association does for doctors.

The fact that there is no self-governing association is important since such organizations typically oversee codes of ethical conduct, thus hoping to ensure professionalism of its members. In recent years, a rash of corporate scandals such as those at Enron, WorldCom, and ImClone, has made ethical conduct especially relevant, as the CEOs of these companies have been implicated for mismanagement, thus questioning the competence and trustworthiness (in essence the professionalization) of CEOs (Byrne, 2002).

Despite the arguments by organizational theorists that chief executives do not merit the designation of profession, the fields of business and business education have argued otherwise. As long as 40 years ago, Bernard Barber (1963) performed a sociological analysis of business to conclude "American business ought to be, and is in fact becoming, more professionalized."

This paper attempts to analyze the debate whether Chief Executive Officers deserve being members of a profession. It has been an interesting question for occupational theorists, yet business and management scholars have largely ignored it, perhaps assuming executives are indisputably entrenched in the professional realm. One exception to the management literature is Trank's and Rynes's (2003) recent essay that argues that business education has become less professional, thus suggesting the professionalism of business school graduates has diminished as well.

To analyze the question of the professionalization of CEOs, this paper borrows from the work of occupational theorists who have identified criteria for an occupation to be established as a legitimate profession, and compares these criteria with the demographic traits of the CEOs of 247 companies over the course of 30 years, beginning in 1960, the approximaate time of Barber's sociological analysis, to 1989. If the field of CEOs has become more professionalized during this period, the demographic traits of CEOs should change over time to reflect the increased professionalization.

This paper has five sections. …