Top ce os
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This document discusses research analyzing the relationship between the financial performance and social/environmental performance of over 1,100 CEOs. The research found no overall correlation but identified some CEOs who excelled in both areas. A few examples of CEOs who delivered great financial returns while also having strong social/environmental performance are highlighted, such as Franck Riboud of Danone and Alessandro Carlucci of Natura. The document also discusses how evaluating CEOs based on both financial and non-financial metrics could help encourage more sustainable, long-term leadership.
Top ce os
- 1. Top CEOs
- 2. Top 5 Female CEOs • 1. Margaret C. WhitmanCompany eBay, United States Industry Information Technology Tenure 1998–2008 Total Shareholder Return Country Adjusted 1,434% Industry Adjusted 1,368% Market Capitalization Change +40B
- 3. • 2. Dong MingzhuCompany Gree Electric Appliances, China Industry Consumer Goods Tenure 2001– Total Shareholder Return Country Adjusted 975% Industry Adjusted 1,360% Market Capitalization Change +8B • 3. Carol MeyrowitzCompany TJX, United States Industry Retail Tenure 2007– Total Shareholder Return Country Adjusted 226% Industry Adjusted 204% Market Capitalization Change +24B
- 4. 4. Zou LihuaCompany Xinhu Zhongbao, China Industry Financial Services Tenure 2006–2009 Total Shareholder Return Country Adjusted 167% Industry Adjusted 284% Market Capitalization Change +7B 5. Heliane CanepaCompany Nobel Biocare, Switzerland Industry Health Care Tenure 2001–2007 Total Shareholder Return Country Adjusted 142% Industry Adjusted 225% Market Capitalization Change +8B
- 5. Top 5 CEOs Europe • 1. Graham MackayCompany SABMiller, United Kingdom Industry Consumer Goods Tenure 1997– Total Shareholder Return Country Adjusted 758% Industry Adjusted 626% Market Capitalization Change +70B
- 6. • 2. Lars Rebien SørensenCompany Novo Nordisk, Denmark Industry Health Care Tenure 2000– Total Shareholder Return Country Adjusted 470% Industry Adjusted 804% Market Capitalization Change +64B • 3. Paul ChisholmCompany COLT Telecom Group, United Kingdom Industry Telecommunication Tenure 1996–2001 Total Shareholder Return Country Adjusted 1,905% Industry Adjusted 1,761% Market Capitalization Change +20B
- 7. • 4. Gareth DavisCompany Imperial Tobacco, United Kingdom Industry Consumer Goods Tenure 1996–2010 Total Shareholder Return Country Adjusted 977% Industry Adjusted 579% Market Capitalization Change +27B • 5. Mikael LiliusCompany Fortum, Finland Industry Utilities Tenure 2000–2009 Total Shareholder Return Country Adjusted 768% Industry Adjusted 1,014% Market Capitalization Change +22B
- 8. Top 3 CEO in history • Charles Coffin Up to now, Charles Coffin is still being regarded as the grandfather of the corporate world. He is the one that constructed the platform that other CEOs walked on. Charles Coffin was the first president of General Electric. Unknown to most people is that Charles was initially in the shoe business. As a matter of fact, only a handful of people known of Charles Coffin, which is a testimony of his enormity. His forerunner is the one responsible for his humble nature that led to most people not knowing him in person. Ask any CEO and they will tell you that it is never easy to fill the shoes of the founding CEO. Try to envisage this. His predecessor held a myriad of patents ranging from electric light, motion picture to dissemination of electricity, phonograph and alkaline battery. However, Charles understood his job description, and he comprehended the fact that he would never be the second Thomas Edison, who was his predecessor. But, the one thing he knew was that he could improve on the works of his predecessor and that is exactly what made him a great CEO.
- 9. Bill Allen Bill Allen is known as the CEO that thought bigger. His motto was “Do not chat too much”, instead “Let other people do the talking”. Bill Allen was the CEO of Boeing from the 50s. The aircrafts that his company designed and made are what helped win the war. While Boeing assisted in winning the war, success looked like more of a distant light for Boeing in 1945. The company’s profits dropped by more than 90 percent the moment requisition for bombing planes ceased. The worst thing is that the general public knew that Boeing was not good at anything other than making war planes. While every Tom, Dick and Harry had this thought, its new CEO knew something that every other person did not know. But all that changed the moment he had an idea to venture into the commercial market by building the 707 Boeing jets. The rest as they say is history or the present if you may prefer. Sam Walton Sam Walton is said to have overcame his personality and help start one of the largest retail stores in the world today. Sam Walton was quoted as having said, “I have an appeal of a promoter but the soul of an operator”. Because of what other CEOs did in the past, today’s CEOs in the corporate world have found a platform from which to operate and inspire the future growth of their companies and that of the world. Their actions today, will determine whether the world has something to offer tomorrow
- 10. Does Doing Good Help CEOs Do Well?
- 11. This chart maps the long-term financial performance of some 1,100 CEOs against their companies’ social and environmental performance for their last two years in office. As the relatively even scattering of points across the chart shows, there is no overall correlation between financial results and social responsibility. However, the chart does reveal numerous role models, who excelled in both areas. Socially Responsible CEOs on the Rise Four CEOs whose firms received high ratings for social responsibility moved into the top 15% of financial performers in the 2013 study, joining role models from Natura and Danone. But the chart did reveal outliers. Five percent of the CEOs for which we had sufficient data fell into the box at the top right; they delivered great financial performance year over year and performed strongly on social and environmental dimensions. It is a rare achievement, indeed, but it is possible. These trendsetting CEOs are the new role models for leaders pursuing the paradigm of creating shared value. One example: Franck Riboud of Danone, a French multinational with $27 billion in annual sales. Danone’s excellent financial performance earned him a spot in the top 10% of this year’s sample (a truly amazing achievement for a consumer goods company); at the same time, the company received extremely high ratings from MSCI. Another outlier is Natura’s Alessandro Carlucci (who made the top 6% for financial performance), a leader among CEOs who believe that alleviating poverty and inequality and protecting the environment are intimately tied to their business agendas.
- 12. Carlucci and Riboud have both confronted the key social or environmental issue in their industry (in Danone’s case, obesity and unhealthful food consumption; in Natura’s, deforestation and poverty) and redirected their company’s strategy to tackle it. We also looked at CEOs whose companies had high social and environmental performance in 2010 but whose financial performance kept them out of the top 15% of the group studied that year. Since doing both well and good can be a long- term strategy, we wanted to see whether any of those CEOs had then moved into the top 15% of the current financial ranking. We found four: the leaders of Adidas, Inditex, Hermès International, and Eaton. At Adidas, CEO Herbert Hainer oversaw the implementation of a triple-bottom-line philosophy, a massive push to slash the company’s carbon footprint, and the increased use of recycled polyester as well as sustainably farmed cotton in products. One of Adidas’s latest sustainable innovations is DryDye technology, which removes the need for water in the dyeing process. At Eaton, Alexander Cutler has embedded sustainability into the company’s culture and practices. The diversified power management company develops innovative products and processes, such as hybrid electric and hydraulic power trains and electric power control systems, that help customers and consumers conserve resources and reduce their carbon footprint. This new breed of leaders not only rejects the idea that financial market demands are more important than stakeholders’ needs but also demonstrates that companies can excel at meeting both. These CEOs have shown the way, and others can learn from them.
- 13. We don’t foresee a time in the near future when measures of social performance will be as objective as the measure of long-term financial performance we’ve developed. That said, we will continue to track how CEOs are doing in the two areas, with the aim of encouraging leaders to shine in both. Everyone in the business world seems to agree that executives should be less obsessed with quarterly earnings and more focused on the long term— everyone, that is, except the decision makers who hire and fire executives and the people who buy and sell company stock. The short-term emphasis won’t change until a new paradigm for evaluating performance emerges. Talk alone won’t bring about that change; we also need a whole new method of evaluating CEOs. Here, we’re proposing two key improvements: a robust, objective measure of leaders’ performance over their full terms in office, benchmarking all chief executives of major global companies; and an assessment of the correlation between a firm’s financial results and its environmental and social practices. We hope that boards of directors, pension funds, hedge funds, and other shareholder activists will use these measures to better evaluate CEOs and to guide the selection of tomorrow’s leaders.