Septuagenarians aren’t just ruling the roost in Washington. At least two large American companies also have tapped seniors to turn around their operations, in a clear demonstration of the value that boards are placing on experience.
Donald Trump was 70 when he entered the Oval Office, while two of the Democrats named as most likely challengers in 2020—Bernie Sanders and Joe Biden—are both well into their 70s.
Now, although the average age of CEOs of the top 1,000 companies in the U.S. is 58, American Insurance Group has turned to veteran performer Brian Duperrault, aged 70, to take on what is arguably one of the toughest jobs in corporate America.
His appointment came even as AIG’s board grapples with a lack of consistent leadership that has seen it churn through seven CEOs in just over a decade. Duperrault’s age means there’s a risk the board, once again, will have to consider succession sooner than hoped. But in the end, his experience has won the day.
“Brian is uniquely qualified to lead AIG at this important time. [HE] has spent his entire career in insurance.”
Duperrault’s career includes a 21-year stint at AIG. He also has headed up ACE, now known as Chubb, and is credited with turning around broker Marsh & McLennan as CEO before going on to found and lead Hamilton Insurance Group. “Brian is uniquely qualified to lead AIG at this important time,” its chairman, Douglas Steenland, said. “Brian has spent his entire career in insurance.”
His appointment comes a few months after Hunter Harrison, 72, was hired as CEO of railway operator CSX Corporation with a lofty sign-on payment of at least $82 million. Like Duperrault, Harrison is an industry veteran, who, in his case, is credited with turning around three major railroads.
Their appointments come despite research indicating that CEO performance, on average, worsens with age, perhaps due to deteriorating cognitive abilities. A study published last year by University of Missouri assistant professor Adam Yore found that CEO age was associated with a 0.3% decrease in the value of the companies they were running. Older CEOs also were found to be less active, as measured by events such as mergers, hirings and firings.
There also may be a perception that older CEOs will more likely be bound by tradition—but just try telling that to Duperrault and Harrison, who have both been credited for coming up with new ways of running their businesses.
Duperrault, for instance, introduced cutting-edge data science and analytics into the insurance industry. “He is a hands-on leader who has consistently delivered strong bottom-line results,” Steenland said. “He has demonstrated a passion for deploying new and innovative ways to serve clients.”
Harrison’s more recent success, meanwhile, can largely be pinned on his so-called precision railroading system, which broke from the traditional method of waiting until trains were full before loads were dispatched.
Around half of America’s 500 largest companies still have mandatory retirement age policies in place, in recognition of the limitations that come with age. To be sure, as recently reported by Chief Executive, the average age of CEOs has risen, perhaps thanks to advances in medical technology and general improvements in living standards that are stretching life expectancies.