Who becomes CEO in a pandemic?

Good morning.

Who becomes CEO in a pandemic? COVID seems to have caused corporate boards to become more conservative in their searches, at least in the short term, according to a report out yesterday from Heidrick & Struggles. An analysis of 965 CEOs of the world’s largest companies found there were notably fewer new CEOs appointed between March 11 and June 30 than during the same period last year. 

In the U.S., for instance, there was only one new CEO reported, compared to seven in the same period in 2019. Diversity also fell, with women accounting for only 3% of all new CEO appointments, compared to 12% in the five months leading up to the pandemic. And external appointments rose, accounting for 57% of the new CEOs appointed between March 11 and June 30, compared to 35% in the five previous months. Some 63% of the new CEOs had previous experience as CEOs—something true of only 44% of those named in the prior five months.

While the unique challenges of 2020 drove boards to seek experienced executives to fill the top job, CEOs also made clear that the demands of the job changed dramatically. McDonald’s CEO Chris Kempczinski, for instance, said “one of the necessary parts of leading through the pandemic has been having a sense of humility… You need to have empathy to understand how people are feeling and to be able to adjust your style to the myriad of ways they process.” 

Dr. Johannes Bussmann, CEO of Lufthansa Technik, said the CEOs have had “to be proficient in a variety of virtual and face-to-face interactions. Their constant presence in their employees’ lives creates a level of personal closeness with the CEO not seen before.” You can read the entire report here.

Separately, Allstate CEO Tom Wilson called to report he had completed a $1.2 billion bond deal using only minority, women and veteran bankers—the largest corporate bond offering ever done exclusively by so-called MWVBEs. Those firms currently handle only 4% of corporate investment-grade bond issues. Wilson said he has called on the CEOs of a number of other firms to do similar deals. “This is not just pledging, it’s acting,” he said. “We just need to take a stand and do things differently” to create more equity in securities markets.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

Fed lending

Treasury Secretary Steve Mnuchin is going to let several of the Federal Reserve's emergency lending programs expire at the end of the year, stopping the Fed from being able to lend further trillions into financial markets. The Fed has publicly disagreed with the decision to remove the backstop. However, some say the programs could be revived if needed, either by Mnuchin or his Biden-administration replacement. CNBC

No remdesivir

Stop using Gilead Sciences' remdesivir to treat hospitalized COVID-19 patients, says the World Health Organization. The WHO stresses that there's no evidence for the antiviral making survival more likely or reducing recovery times. It's a blow for Gilead, which has previously seen the U.S. Food and Drug Administration approve remdesivir approve the drug for use in the COVID context. Fortune

Cell therapy

The Swiss drugmaker Novartis has signed a $50 million deal with Australia's Mesoblast, securing the rights to develop, commercialize and manufacture its Remestemcel-L cell therapy for acute respiratory distress syndrome. The treatment could prove handy in treating COVID-19 patients. Reuters

Vaccine bill

The European Union has kept a lid on the amounts it's paying to secure hundreds of millions of potential coronavirus vaccine doses, but some details are coming out. According to Reuters, the EU will pay up to €3.1 billion ($3.7 billion) for 200 million doses (or €4.65 billion for 300 million doses) of Pfizer and BioNTech's vaccine, and at least €4.05 billion for 405 million doses of CureVac's vaccine. Reuters

AROUND THE WATER COOLER

Hydrogen power

Fortune's Katherine Dunn examines the much-touted potential of hydrogen to power cars, trucks and factories: "The most abundant element in the universe, hydrogen is viewed as a tantalizing substitute to natural gas and coal to help heavily polluting sectors such as aviation, steelmaking, and shipping de-carbonize. As an added bonus, some of the existing infrastructure in our carbon-dependent economy, from pipelines to refineries, can be retrofitted to hydrogen-based energy production." Fortune

China hopes

American companies in China reckon the Biden administration will bring better business prospects. In a survey by the American Chamber of Commerce in Shanghai, over 60% of U.S. respondents said they were "more optimistic" or "much more optimistic" about the future, now Biden is president-elect. A mere two of the 124 surveyed companies are feeling more pessimistic now. Fortune

CDC plea

Please don't travel for Thanksgiving, the Centers for Disease Control and Prevention begged Americans yesterday. CDC COVID-19 incident manager Henry Walke: "Covid-19 is turning out to be quite a formidable foe…We must unite in our efforts against this virus and now more than ever, not let down our guard." Wall Street Journal

Koch plea

In a piece for Fortune, Charles "Boy, did we screw up" Koch urges everyone in the U.S. to move on from the current "us-versus-them mentality of partisan politics" and sings the praises of democratic rituals, such as election losers conceding and all Americans acknowledging the outcome. Koch: "In these trying times, instead of doubling down on the contest for who will have power over others, we must unite to help empower every person from the bottom up so they can contribute and help others lead better lives." Fortune

This edition of CEO Daily was edited by David Meyer.