Every year business magazine Harvard Business Review (HBR) publishes a top 100 list of the best performing CEOs. But it’s not a high-profile name which is leading the list, neither is it a CEO of a trendy company. This year’s Top CEO is Lars Rebien Sørensen of health care company Novo Nordisk. Surprisingly, much celebrated names as Elon Musk, Tim Cook or Mark Zuckerberg did not make the list. Also there are only 2 women to be found on the list.
Earlier we pointed to the fact that sustainability is increasingly important in doing business. This year, HBR acknowledged the growing role of sustainability and incorporated ESG-criteria in its ranking: Environmental, Social and Governance performance. For 80%, the score is based on financial criteria: total shareholder return and change in market capitalization. This year 20% is based on ESG-score. This has a huge impact. In case only the financial score mattered, Jeff Bezos of Amazon would have been no. 1. However, due to a dismay ESG-score by Amazon, he dropped to no. 87. Fun fact: Warren Buffett just missed the cut and ended being no. 101. Not so funny: this is also due to a poor ESG-score, otherwise he would be no. 2 in the list. Not so funny part 2: Martin Winterkorn (now ex-Volkswagen) ended no. 20, since the list was made before ‘Dieselgate’ hit the newswires.
An interesting side-effect of including the ESG-score is that HBR’s CEO-ranking becomes more global. The top 10 offers just 3 CEOs of US-companies, but instead features 6 from Europe and one from Japan. Apart from that, Sørensen is not an US-native, but comes from Denmark. The Danish CEO works for more than 30 years for Novo Nordisk. This is a feature which can be seen by many other CEOs in the list: 86% of them worked on a lower level in the company before accepting the role as the company’s leader.
Adding to the mix that the average CEO on the list is a male between the age of 50-65, we get a quite ‘boring’ picture of the best leader. What’s wrong with the celebrity CEO? The names of Zuckerberg, Musk, Cook etc. are generating headlines and even provide stuff for movies! While there’s nothing wrong with inspiring leaders or remarkable figures, successfully leading a company is probably a lot more complex in today’s world. The role of a company is not to create headlines but to achieve a long term, financially successful and sustainable place in the economy. That’s sometimes rather dull. No. 1 CEO Sørensen for instance says he doesn’t use the private jet because he doesn’t want to draw
a picture that his time is more valuable than that of other employees. Well, since the 1989 classic “Barbarians at the Gate” having private jets is already for a long time on the blacklist. But this remark shows that being an inspiring leader is not about creating timeless quotes, but showing the right example.