First Click: The best CEOs, ranked

October 13th, 2015

7

Who’s the best CEO? That depends how you define the role.

Ask Siri what CEO means and you’ll hear an approximation of a human voice spell out the abbreviation. Ask Google, and you’ll elicit a factual response describing the chief executive officer as “the highest-ranking person in a company or other institution, ultimately responsible for making managerial decisions.” But that’s only scratching the surface.

When Nilay Patel asked Satya Nadella, the relatively new CEO of Microsoft, we learned that the role is much more sophisticated than that. "As a CEO, what is your job?" Nadella wondered aloud. "You sort of feel like, yeah, you know what it is, you get the intellectual side of it. But there is something that only a CEO uniquely can do, which is set that tone that then can capture the soul of the collective. It’s culture." He added. "The job of the CEO is curating the culture that makes excellence happen."

Increasingly, CEOs are treated as celebrities. In recent years, biopics on Steve Jobs and Mark Zuckerberg have become international blockbusters, while books chronicling the rise of Amazon’s Jeff Bezos and the quartette of Twitter founders hit the New York Times bestseller lists. Success has yielded a bully pulpit from which CEOs have felt more comfortable commenting on complex social and political issues just like the Hollywood elite.

In light of all this, it’s not surprising that the Harvard Business School has switched up its methodology for ranking the world’s top CEOs. Gone are the cold, objective measurements of yore, replaced this year with a new weighted scale. 80 percent is determined by long-term financial results (total shareholder return and change in market cap) while 20 percent is now weighted by performance with respect to environmental, social, and governance (ESG) issues. So while Jeff Bezos is number one again as he was in 2014 based upon purely money metrics, his ranking now drops to #87 due to a very low ESG ranking of 828 (out of 907 CEOs). The Financial Times reports that the low ESG is due to overriding concern with patent lawsuits, tax avoidance, and treatment of office and warehouse workers. The number one spot was given to healthcare CEO Lars Rebien Sørensen of Novo Nordisk with a financial ranking of 6 and ESG of 15.

Notably, Apple’s Tim Cook, Microsoft’s Satya Nadella, Google’s Sundar Pichai, and Alphabet’s Larry Page don’t make the top 100, but VW’s disgraced CEO Martin Winterkorn is #20 with an ESG ranking of 48 (the list was produced before the recent scandal.)

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