Top CEOs are male, 60 years old and insiders, says HBR

26 October 2015 Consultancy.uk

Last week Harvard Business Review released the 2015-edition of its top ‘100 Best-Performing CEOs in the World’, this year topped by Novo Nordisk CEO Lars Rebien Sørensen. The list includes both financial and environmental, social, and governance metrics, and analysis shows that top CEOs are insiders, do not hold MBAs, and are males between the ages of 55 and 65.

The ‘100 Best-Performing CEOs in the World’, published annually by the Harvard Business Review, is calculated using two metrics: the long term financial success of the leadership, which includes shareholder return and changes to the company’s market capitalisation, weighted at 80%, and the environmental, social, and governance (ESG) performance of companies, weighted at 20%. This year 907 CEOs from 896 companies based in 30 countries were included in the assessment, representing 46 nationalities.

Top 5 Best-Performing CEOs in the World

This years’ top ranked business leader is Lars Rebien Sørensen, CEO of diabetes pharmaceutical concern Novo Nordisk, who scores highly on the financial metric (ranked 6 of the top 100) and highly on the ESG (a ranking of 15). On the question of how the mild-mannered, bespectacled executive landed the top spot, HBR says “It’s partly due to his company’s (darkly) fortuitous decision years ago to focus almost exclusively on diabetes treatment. The runaway global growth of the disease has driven up the company’s sales and stock price.” 2014 winner Amazon’s Jeff Bezos, again leads all other CEOs on the purely financial metrics, yet Amazon’s relatively poor ESG score drags Bezos down to #87 overall.

The CEO of the Danish pharmaceutical giant is followed by Cisco boss, John Chambers, who possess strong financial performance (ranked #7), and an ESG score of 69. Pablo Isla from Inditex comes in at number three, scoring well in the financial metric (20) and ESG (49). Continental CEO Elmar Degenhart secures the number four spot, with a good financial score (27) and ESG of 120. WPP boss Martin Sorrell tops off the top 5 list with a financial score of 15 and an ESG ranking of 187.

Founder vs Non Founder - Outsider vs Insider

Top CEO Attributes
Analysis on the dataset reveals insights into what characteristics make for top ranking bosses. One interesting discovery from the analysis is that top CEOs tend to be insiders, promoted from internal ranks – 86 of the 100 on the list are insiders. Of these 86, one in five (19 of the 100) is a founder.

Holding an MBA appears not be a strong requirement for the top job, with only 26% of top CEOs having graduated business school. Being a male in their middle age seems to increase one’s job prospects for a top level position, with 98% of CEOs on the list male and 65 of the 100 positions filled by someone between 55 and 65. Only 1 CEO on the top list is below 45, while two leaders have passed the age of 75.

MBA vs No MBA - Female vs Male

The researchers also look into the industry split of the top 100 CEOs. The results reveal that three industries can be regarded as the ideal breeding ground for high performing leaders: consumer goods, health care and financial services, each with 13 CEOs. Retail comes in at number four with 12 top CEOs, while Energy and Utilities close the list with 2 and 1 CEO(s) respectively.

Industry CEOs

 

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