How Is AI Affecting Leadership at Companies? This CEO Weighs In

Hello everyone and welcome to at Barron's. I'm Andy Serwer and welcome to our guest Constantine Alexandrakis who is the CEO of Russell Reynolds, the executive search firm. Constantine, great to see you. Thank you. Great to be here. So, tell us about the firm in terms of size. How do you measure it? Uh well, we measure our our size in terms of impact. There's a private partnership. Um we know that we are among the few elite firms in the world that serve our clients at the level of board and CEO work that we do. Um and we've got thousands of employees around the world that uh contribute to our mission every day. And our purpose is to improve the way the world is led, uh which is something that um we're all very committed to. Do you talk about revenue as a private company? We don't talk about it uh publicly, no. Okay. How many searches do you do a year? I'm just trying to get a size and scale here. — roughly 7,000 searches a year. Right. And how does it work? Is it on a commission basis? Do you have long-standing relationships with client companies? Uh so, the revenue model is essentially um our every project, whether it's a search project or consulting project, cuz we do both, um has a certain fee associated with it. And that's how we earn our fees. Um and uh our employees are compensated based on their contributions to the firm. You are one of four or five big executive search firms, which are as you said are now sort of going into consulting as well, and we'll get into that a little bit more. How is Russell Reynolds differentiated, Constantine? We like to think of ourselves um not just a search firm, but a leadership advisory firm, which means we don't just identify executives, we assess them, uh and we develop them. And we like to approach our clients not with here's a service that we can provide to you, but rather you have a business problem, leadership is a key component of solving that problem, and we're here to figure out how to help you solve that problem. Someone uh wrote that you guys use psychometric data. Is that correct? What does that mean? Psychometric data is um data uh uh based on a test that an individual candidate takes or a leader who's part of a team effectiveness project we may be working on, and it's designed by an expert firm like Hogan Assessments, which really uh is able to ascertain the person's psych profile. So, what motivates them, what are their biggest fears, what are the um the hurdles they have to undertake to do certain things. And it's just one piece of an assessment, but it's a very important part of uh what makes each of us function the way we do. Right. Do you ever talk about some of the CEOs, your greatest hits, some of the people you placed or and maybe some that didn't work out? We try to keep that confidential. Uh so, we don't really talk overtly about uh who our successful um placements have been, uh but uh they're if the list were here would be very familiar to you from the headlines of every day. Fortune 100, Fortune 500 CEOs and in the C-suite globally and globally. So, it's board, CEO, and C-suite. — Right. Can you talk about some person that didn't work out for whatever reason? I mean, are there stories, your war stories like, "Oh my goodness, we just totally botched that one. " I know you probably have multitudes of success stories, but what goes wrong sometimes? Look, one example comes to mind where it's a matter of um the board and the work we did for them helped us determine who the CEO should be. Um and they selected the CEO, but the environment changed very dramatically after 12 18 months. Um it became clear that person was not going to be the right person for the role. Um so, it wasn't a matter of a bad selection at the time, it was a matter of circumstances changing faster than anticipated, um and the board came back to us and said, "We really need to rethink this. How do we go to the next phase of leadership for this company? " Talking about things change very quickly. Kind of the elephant in the room is AI and jobs. And of course, mostly this applies to sort of lower-level jobs, but I'm wondering how is AI changing leadership at companies? It's less AI is less of a technology issue uh for leadership and more of a um change management issue. So

um it's changing where leaders are spending their time because they have to spend a lot more time um talking about how technology is impacting the workflows of their business, um the ways they're getting work done, and their operating model. Um and that requires leaders who are much more agile at learning new ways of doing things, and how to um inspire employees to change the way they work using the new technology. Um at the CEO level, um CEOs have never talked about tech as much as they are talking about it now. Um but again, it's not so much about the technology itself as it is uh the way ways of working are going to change with it. Does that also apply to boards? Boards are very uh tuned into um the risks and opportunities associated with uh AI, um and are spending a lot of time putting pressure on CEOs um to figure it out. Sometimes um boards are um putting a little too much pressure on CEOs who um you know, have a whole organization to drive through layers of change and process re-engineering, which takes time. Uh and sometimes boards aren't as patient about that. What about your own business, Constantine? Are you using AI and is it sort of changing? I mean, everyone sort of like has everyone else's Rolodex now because of AI, right? And so, how is that making your job easier or more difficult even? So, if you're talking about the Rolodex, Andy, I it we have to go back to when LinkedIn was introduced back in the early 2010s, right? Because um before that, our business was about having the best list of CEOs. Um and when LinkedIn came about, suddenly that information was ubiquitous. Um so, it's over the past 15 years become our business has become less about identification and much more about assessments um and attraction of the right individual in a very fiercely competitive market. Um and uh with AI, um that's much more about helping us speed up how we serve our clients, um and also helping us um increase the analytics that we use to help our clients de-risk the hiring decision. And you really don't have any industry sectors that you specialize in necessarily. We specialize in all the major industry sectors, industry verticals, and functional horizontals. Right. And I mentioned this group, it's almost an oligopoly, I think, really at the very top of your business with Heidrick and Struggles, Korn Ferry, um whom I'm missing? Spencer Stuart. Do you guys ever get together and talk or is that verboten? Uh the CEOs um of most and not all of them, but most of those firms uh get together uh as friends from time to time, but certainly it's a fiercely competitive market as well, and uh we are all fierce competitors. How does economic activity inform search or vice versa? In other words, can you tell what's going on in the economy by how the search business is doing? How is it reflective? — Look, it's interesting. We've I've been asking ourselves for many years, are we leading indicator or lagging indicator? And um historically, the cyclicality of the economy um has translated into cyclicality for us. So, we've been a slightly lagging indicator, but in the last 5 6 years since the pandemic, um that correlation has been a bit decoupled. Um and as volatility increases, um historically our our business decreased, but it's actually been increasing. So, what does it say right now? Um it says that there's a lot of change out there in the leadership ranks. You have a CEO global turnover index, right? — Yes. And CEO turnover is a big deal, and I'm wondering what that's telling you right now. And how long have you had it? What's How's it How's the ranking look? Well, we've had it, I think, for 4 5 years, and uh turnover is at uh an all-time peak, and tenure continues to drop significantly. Um it was just over This is the at on a global level, it was just over 7 years uh in 2025, uh dropping uh almost a uh a year in the past 24 months. Um so, there's a lot of um upheaval reflected in those statistics. Right. I mean, I did some work on this and I noticed there's maybe sort of a

barbell effect where on the short end there was a lot of churn, more and more churn, and people were kind of washing out after say two or three years not hitting that 7 to 10 sweet spot. And then on the other side, you had these what I was calling them forever CEOs, you know, like the Jamie Dimons of the world. When you going to leave? How about never, right? Are you seeing that? Um we are seeing that anecdotally, but the average tenure continues to fall. So, um even at the bar Jamie Dimon barbell end of the barbell, um there is a bit of a decrease in the tenure of longer tenured CEOs also. Um and it's, you know, you your next question is probably why is this happening? Um I think there are a number of factors. Um boards are becoming less patient. Um the time frame that they're assigning uh to evaluating a CEO is shrinking, um but also the CEO job is becoming much more complicated. In the previous decade, uh CEOs were dealing with steady policy environments, um relatively steady macroeconomic technological advancements. All those things are now much more volatile and uncertain, and that adds a lot to a CEO's plate in addition to building the business, growing the business, managing people, galvanizing teams, managing stakeholders on the board and the shareholders. Just tapping on one of those points, when should chief executive speak out? About? — About say political issues, about anything. Uh you know, I think that is up to each chief executive and and their uh their teams and their boards of directors, um but certainly from the CEOs that I talk to, almost all of them are just heavily focused on the business and on execution and on navigating uncertainty and keeping their teams on track uh with all the distractions in the world. What happens when there's an M& A deal and two companies come together? Do you actually do work there? Like who becomes the CEO? Who gets to leave the company and how the person the other person has to leave? Sometimes that's often sorted in the transaction early, but where we um would come in is when the companies are deciding on what the combined executive team is going to look like. So, we will help them assess the leadership from both sides of the combination and help them determine uh who will lead the new entity going forward. We might also help them at the board level determine what the combined board should look like. Our boards have boards changed at all over the past decade or so, Constantine, in terms of getting bigger, smaller? There was push for diversity, maybe not so much anymore. What's going on there? There are a couple things that have been happening the last couple years. One is that uh the number of new board member or the types of new board members are increasing increasingly retired CEOs rather than active CEOs, and we attribute that to the fact that active CEOs are really busy, as I said before. Um and they're the ones who are retired are more available. Um we're also seeing uh a steady increase in the average age of board members of so as some boards relax their retirement rules um in favor of keeping important uh talent on the board. Um so, some of the demographics are shifting, um but certainly uh the focus of boards on the value creation that management is driving and on um growth uh continues to intensify. Are those changes good or bad? Um I think time will tell. Um certainly um anything that preserves the uh stability of a board and the value that they're providing to management and to shareholders is positive, um but also there at some point needs to be a generational shift in our governance in this country and um that is certainly a sort of underlying thing that could get delayed by some of these demographic shifts. Yeah, I mean, you've seen a lot of talk about there's too many old people staying in their jobs, maybe in government more than in the private sector, but there's some CEOs who just want to stay there forever, it seems. Often they have say a controlling stake in the company though, right? Uh it it depends on the circumstance, Andy. I think if uh CEO's doing a great job uh and is creating value and the board and shareholders are happy with what he

or she is doing, um they should be able to stay until whatever age. What does it take to be a leader in this environment today? Uh it takes resilience. It takes the um ability to really treat uncertainty as an as a certainty and to be able to um be able to focus on within that environment how to execute uh properly and how to galvanize other team members to drive execution. It's also because the CEO role has become so complicated, um it's very much about not just about a CEO driving the business, but the CEO driving a transformational team to drive the business. Well, maybe in part because of this complication uh and complicated environment that you talked about, you're seeing a lot more co-CEOs. Um is that just anecdotal or are you really starting to see that more? And is that a good thing or a bad thing? Well, I get that question a lot and um we've done the research on it. It feels more anecdotal. No board of directors begins a CEO succession process and says, "We think co-CEOs would be great for this company. " Uh but there are circumstances, as you know, where um it just makes sense given who the incumbent leaders are or the circumstances of the organization or the chemistry between the two candidates, where co-CEOs work great for that organization. Mm. So, you're not a big fan unless it's sort of organically occurs, it sounds like. I'm saying that boards generally are looking for one leader, but make exceptions in circumstances that make sense. Right, right. Getting back to AI a little bit, Constantine, is there a chief AI officer role that exists that people are looking for? We have a lot of demand for executive searches for that kind of role, but um it's pivoted over the last 12 months. It went from being a technology role 24, 18 months ago to now being a business role that's about uh workforce transformation, workflow transformation, process transformation. So, it's less the head of AI transformation is more of a business transformation role rather than a technology role. Yeah, speaking of technology, you know, there's a CTO, the CIO. What's the difference there? I mean, you have to keep up with all these new little acronyms. Is there a sort of acronym inflation going on? In the technology realm? — Well, just generally, you know, I mean, it seems like there's new C-suite roles all the time. Yeah, I think Well, but I think that's a good thing, actually, because um as companies modernize, as the needs of customers change, of of employees change, companies invent new ways of managing through that. So, um there every few years some new titles come up and others uh lessen in importance. A lot of people um point their fingers at in the C-suite and CEOs getting paid too much money and blaming compensation uh committees of boards. We're seeing this sort of like endless um warfare, I guess, to escalate salaries. Is this something Americans should be worried about? Look, I think we just spoke a couple minutes ago about how the CEO role is becoming increasingly complex um and uh the it's cliche to say that it's a very lonely role and it's a it's a role that is pivotal to the success of any organization. So, um the boards that we work with um are very careful to ensure that um they are compensating their CEOs at the level commensurate with the value that they bring. Um so, um I I would not say that that's a uh a significant problem. Russell Reynolds private, you mentioned that. Any plans to go public? Why are you private so long and this why does this work for you guys? We pride ourselves on being a private partnership and being uh able to serve our clients without the pressures of being a public company. So, we have no plans to go public and our partners are very proud of our firm and the legacy that we're creating for our clients. You've been CEO, final question. You've been CEO for about four years now. You've been at the company for many years. Did you always want to become the CEO of an executive search firm when you were a little kid? How did you get to this role? It's a great question. I know I had no knowledge of the industry when I was a

little kid, but also later in my career even when I joined Russell Reynolds 20 years ago, I becoming CEO was not a goal of mine, but as I developed as a search consultant and took on more and more leadership, I became excited about helping our firm evolve and change and grow into the next phase of its success. So, that's really what motivated me. Konstantine Alexandrakis, CEO of Russell Reynolds, thank you so much for joining us. Thank you Andy for having me. This is at Barron's. I'm Andy Serwer. We'll catch you next time.