World's Top 100 CEOs 2017: HBR
Harvard Business Review (HBR) came out with a list of world's best-performing CEOs in 2017 . The list, in its sixth edition since 2010, is as comprehensive as they come, yet by its own admission, might not be as inclusive as is possible. The list, unlike several other ranking mechanisms that use a singular yardstick in a short-term time frame, ‘relies on objective performance measures over a chief executive’s entire tenure—numbers that often hold steady.’ Furthermore, in addition to long-term stability, HBR also takes into account multiple other factors besides the financial performance. Let’s take a look at how the list was determined, what are the larger trends this year, and who made it to the list:
How did HBR decide who makes it to the list?
Companies that were a part of S&P Global 1200 Index at the end of 2016 were considered at the very first stage. CEOs who had been at their job for less than two years were then dropped to account for a fair evaluation of a sufficient record, as were those convicted of a crime or arrested. In the end, 898 CEOs from 887 organisations in 31 countries were selected for further study.
The organisation’s financial data from the CEO’s first day on the job till April 30, 2017 was then compiled, and various parameters filled, like country-adjusted total shareholder return, industry-adjusted total shareholder return, and change in market capitalisation. The 898 CEOs were then ranked from best to worst, and then data from Sustainalytics, a leading provider of ESC research and analytics, and CSRHub, which collects, aggregates and normalises ESG data, was incorporated. The final ranking included an 80% share of the overall financial ranking, and two 10% ESG rankings by the two firms.
A CEO’s capability was initially measured only on the basis of financial performance up until 2014. This methodology was revised in 2015, when the list was in its fourth edition, and in addition to the financial aspect ESG (Environmental, Governance and Social) Ratings were also included in the metrics. As a result, Jeff Bezos, Amazon’s founder, who was at the top spot in 2014, dropped to the 87th rank in 2015 (he has since climbed to 76 in 2016 and 71 this year).
What are the general trends in this years’ list?
Several interesting patterns and observations have been highlighted in the 2017 edition. The research team that drew the list itself notes that there are noticeable consistencies from 2016, owing to the same ranking methodology; it is open to admit that the ranking is a ‘work in progress to look for ways to improve the methodology’. Here are some of the more interesting trends:
- The list if topped by Pablo Isla, of Inditex, from Spain, who is at the top spot for the first time. Inditex is the parent company of retail fashion brands like Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Uterque and of the housewares retailer Zara Home.
- During his tenure, the market value has grown sevenfold, and if only financial returns were accounted for, Isla would have been awarded the 18th rank. However, Inditex’s stellar performance in the ESG factors pushed him to the top spot.
- 72 of the last year’s 100 leaders recur this year, and 23 of them are making it to the list for the fourth year running. Of the 28 who didn’t make it to the list, 11 retired.
- 20 CEOs are heading organisations outside their countries of birth, and the average age is that of 44 years – with office tenure of 17 years. 81 of those who made it to the list were insiders of the company.
- 29 of the leaders have an MBA degree (Pablo Isla doesn’t have one), and 32 have an engineering degree.
- The most disappointing fact is that only two of the 100 leaders are women.
The complete list of Top 100 CEOs is as follows:
- PABLO ISLA - INDITEX
- MARTIN SORRELL - WPP
- JENSEN HUANG - NVIDIA
- JACQUES ASCHENBROICH - VALEO
- BERNARD ARNAULT - LVMH
- MARTIN BOUYGUES - BOUYGUES
- JOHAN THIJS - KBC
- MARK PARKER - NIKE
- ELMAR DEGENHART - CONTINENTAL
- FLORENTINO PÉREZ RODRÍGUEZ - ACS
- RICHARD COUSINS - COMPASS
- MARC BENIOFF - SALESFORCE.COM
- CARLOS BRITO - ANHEUSER-BUSCH INBEV
- BERNARD CHARLÈS - DASSAULT SYSTÈMES
- LARS RASMUSSEN - COLOPLAST
- BENOÎT POTIER - AIR LIQUIDE
- ANDERS RUNEVAD - VESTAS
- HISASHI IETSUGU - SYSMEX
- WES BUSH - NORTHROP GRUMMAN
- SUH KYUNG-BAE - AMOREPACIFIC
- MICHAEL MUSSALLEM - EDWARDS LIFESCIENCES
- JOHAN MOLIN - ASSA ABLOY
- FRANÇOIS-HENRI PINAULT - KERING
- ROBERT IGER - DISNEY
- FABRIZIO FREDA - ESTÉE LAUDER
- HUGH GRANT - MONSANTO
- RICHARD TEMPLETON - TEXAS INSTRUMENTS
- STEPHEN LUCZO - SEAGATE TECHNOLOGY
- PAOLO ROCCA - TENARIS
- TAI-MING "TERRY" GOU - HON HAI PRECISION INDUSTRY
- RICHARD FAIRBANK - CAPITAL ONE
- LAURENCE FINK - BLACKROCK
- DANIEL AMOS - AFLAC
- FREDERICK SMITH - FEDEX
- MARILLYN HEWSON - LOCKHEED MARTIN
- XAVIER HUILLARD - VINCI
- TAKASHI TANAKA - KDDI
- RENATO ALVES VALE - CCR
- DOUGLAS BAKER JR. - ECOLAB
- AJAY BANGA - MASTERCARD
- SHIGENOBU NAGAMORI - NIDEC
- TADASHI YANAI - FAST RETAILING
- HAMID MOGHADAM - PROLOGIS
- BLAKE NORDSTROM - NORDSTROM
- MICHAEL MAHONEY - BOSTON SCIENTIFIC
- GILLES SCHNEPP - LEGRAND
- MICHEL LANDEL - SODEXO
- HOCK TAN - BROADCOM
- GERMÁN LARREA MOTA VELASCO - GRUPO MÉXICO
- DEBRA CAFARO - VENTAS
- DAVID SIMON - SIMON PROPERTY GROUP
- THIERRY BRETON - ATOS
- SERGIO MARCHIONNE - FIAT CHRYSLER
- WING KIN "ALFRED" CHAN - HONG KONG AND CHINA GAS
- LEONARD SCHLEIFER - REGENERON PHARMACEUTICALS
- LESLIE WEXNER - L BRANDS
- DANIEL HAJJ ABOUMRAD - AMÉRICA MÓVIL
- IGNACIO GALÁN - IBERDROLA
- REINHARD PLOSS - INFINEON TECHNOLOGIES
- MARTIN GILBERT - ABERDEEN ASSET MANAGEMENT
- HUATENG "PONY" MA - TENCENT
- SHANTANU NARAYEN - ADOBE SYSTEMS
- BRAD SMITH - INTUIT
- MARK BRISTOW - RANDGOLD RESOURCES
- MASAYOSHI SON - SOFTBANK
- YASUYUKI YOSHINAGA - SUBARU
- PIERRE NANTERME - ACCENTURE
- OSCAR GONZÁLEZ ROCHA - SOUTHERN COPPER
- JAMIE DIMON - JPMORGAN CHASE
- STEVE SANGHI - MICROCHIP TECHNOLOGY
- JEFFREY BEZOS - AMAZON
- DAVID CORDANI - CIGNA
- BRUCE FLATT - BROOKFIELD ASSET MANAGEMENT
- GREGORY CASE - AON
- MARK BERTOLINI - AETNA
- KENT THIRY - DAVITA
- BRIAN ROBERTS - COMCAST
- STEPHEN HEMSLEY - UNITEDHEALTH
- JAMES TAICLET JR. - AMERICAN TOWER
- ANDRÉ DESMARAIS - POWER CORPORATION OF CANADA
- PAUL DESMARAIS JR. - POWER CORPORATION OF CANADA
- PAUL POLMAN - UNILEVER
- HIROO UNOURA - NIPPON TELEGRAPH AND TELEPHONE
- BOBBY KOTICK - ACTIVISION BLIZZARD
- RICHARD FAIN - ROYAL CARIBBEAN CRUISES
- THOMAS EBELING - PROSIEBENSAT.1
- JEAN-PAUL AGON - L’ORÉAL
- JEF COLRUYT - COLRUYT
- REED HASTINGS – NETFLIX
- LUI CHE WOO - GALAXY ENTERTAINMENT
- JOHN MACKEY - WHOLE FOODS MARKET
- STEPHEN SMITH - EQUINIX
- JOHN WREN - OMNICOM
- TIMOTHY RING - C. R. BARD
- ROB SANDS - CONSTELLATION BRANDS
- XAVIER ROLET - LONDON STOCK EXCHANGE
- ENRIQUE CUETO - LATAM AIRLINES
- SEAN BOYD - AGNICO EAGLE MINES
- JEAN-LAURENT BONNAFÉ - BNP PARIBAS
- IAN COOK - COLGATE-PALMOLIVE
If a quick glance at the list leaves you confused, worry not. Many companies listed here are unheard-of parent groups of much more famous brands and products. Furthermore, if you are wondering how are Tim Cook, Apple’s CEO and Jack Ma, the Chinese mogul (two names that you must have surely heard) not a part of this list – read the methodology of creating the list again! The most popular or famous leaders might not necessarily ace all the parameters of the list.
