Healthcare and pharmaceutical CEOs have professional networks more than 30% larger than those of their peers at other S&P 500 companies, according to a study by BoardEx.
The business intelligence provider conducted an analysis of healthcare and pharma CEOs in the S&P 500 in 2015. These CEOs achieved an average network score of 1224 per CEO, compared to an average of 930 per CEO in the entire S&P 500.
A "network" is a BoardEx metric quantifying individuals' connections based on time overlapping at the same organization. For example, Miles White, the CEO of Abbott Laboratories (ABT) - Get Report worked at Abbott with Richard Gonzales, who is now the CEO of Abbott spinoff AbbVie Inc. (ABBV) - Get Report . That connection yields a 1; the aggregation of these connections constitutes the CEO's network.
Network sizes serve as a proxy for the CEO's influence and power.
BoardEx also measured the total organization networks, an indication of the companies' connectedness to their markets through connections from employees past and present. The average healthcare or pharmaceutical company had 4,850 first degree connections -- such as White's relationship with Gonzales.
In addition, these companies possessed 71,000 second-degree connections. Quest Diagnostics Inc. (DGX) - Get Report CEO Stephen Rusckowski sits on the board of Xerox Corp. (XRX) - Get Report , as does Charles Prince, who also sits on the board of healthcare company Johnson & Johnson (JNJ) - Get Report . The Xerox affiliations give Ruysckowski and Prince a second-degree connection. Similarly, Johnson & Johnson CEO Alex Gorsky sits on the board of IBM Corp. (IBM) - Get Report with Sidney Taurel, the chairman emeritus of Eli Lilly & Co. (LLY) - Get Report . Gorsky therefore has a second degree connection to Taurel, through IBM's board.
Healthcare and pharma CEOs tend to come from similar backgrounds, BoardEx found. 64% boast pharma or healthcare experience, and 59% were internally promoted CEOs rather appointed from outside. On average they are 58 years old, have served as CEO for 8.7 years, and have worked at their respective companies for 15.4 years.
59% attended private universities in the U.S., most commonly Harvard, Stanford, Princeton and Wharton. Gorsky of Johnson & Johnson received an MBA from Wharton, while Abbott's White attended Stanford for both undergraduate and business school.
London-based BoardEx tracks the relationships among directors and senior management of large companies. The service's parent company, Management Diagnostics Ltd., was acquired by TheStreet on Oct. 7, 2014.