Harvard Business Review, January/February 2013 (Photo: Business Wire)
The list, compiled by Morten T. Hansen, Herminia Ibarra, and Urs Peyer all of INSEAD, is based on rigorous analysis of more than 3,000 CEOs around the world and incorporates three metrics: industry-adjusted shareholder returns, country-adjusted shareholder returns, and increase in market capitalization over each CEO’s tenure.
“The knock on most business leaders is that they focus on quarterly earnings at the expense of longer-term performance,” said Hansen, Professor in Entrepreneurship at INSEAD and also at the University of California, Berkeley. “We wanted to shine a spotlight on CEOs worldwide who had created long-term value for their companies.”
Among the authors’ findings:
While no correlation between financial results and social responsibility was found, numerous examples of high-performing CEOs “doing well and doing good” emerged, including Franck Riboud of Danone and Alessandro Carlucci of Natura, who both have 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). Other role models from firms rated highly for social responsibility included the CEOs of Adidas, Inditex, Herms International, and Eaton, who moved into the top 15% of financial performers in this year’s study.
“These trendsetting CEOs not only reject the idea that financial market demands are more important than stakeholders’ needs but also demonstrate that companies can excel at meeting both,” said Ibarra, the Cora Chaired Professor of Leadership and Learning, Professor of Organizational Behavior, and Area Chair for the Organizational Behavior Department at INSEAD.