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INSEAD Professors Release CEO Rankings

Earlier this month, professors at INSEAD released a new ranking of the world’s best-performing CEOs, with the surprising finding that many star CEOs don’t live up to their reputations. Ultimately the study raises questions about just what constitutes effective long-term leadership and whether and why the business community might place higher emphasis on reputation than performance.

To conduct the survey, INSEAD professors Morten Hansen, Herminia Ibarra and Urs Peyer created a benchmark to measure how CEOs have built value over the long term, examining CEO performance at the world’s largest companies over the executives’ entire time in office.

“The real test of a CEO’s leadership should be how the company performs over his or her tenure,’” Morten Hansen, professor of entrepreneurship and management at INSEAD, said in a statement about the study. “As the current economic crisis has taught us, it’s no longer enough to look at short-term gains in regards to executive performance. It is essential to examine the bigger picture.”

Compiling a list of 2,000 CEOs worldwide, the professors then set to work measuring their actual performance based on hard metrics such as shareholder returns and changes in market value. They whittled the list down to the 200 top-performing CEOs and found some surprises along the way. Of particular note was the fact that the top 200 included a large number of relatively unknown and “unsung” CEOs, while a number of high-profile “celebrity” CEOs didn’t make the cut.

All in all, the leading CEOs truly delivered. On average, the top 50 performing delivered a total shareholder return of 997 percent, with the top-spot CEO delivering an astounding 3,226 percent return (30 percent annually).

Of particular interest to the MBA world, the survey revealed that having an MBA was linked to better CEO performance. CEOs with an MBA degree ranked, on average, 40 places better than the CEOs without an MBA.

The survey also revealed that no single country or industry had a lock on performance. The list of the top 50 performing CEOs includes companies based in the United Kingdom, Russia, India, Germany, China, the United States, South Korea, Canada, Brazil, Japan, Finland, France, Spain, Italy, Netherlands and Switzerland.

The study and a list of the top 50 performing CEOs will appear in the January 2010 issue of Harvard Business Review. For a full list of the top 200 performing CEOs in the world and for more information on the survey, click here.

Posted in: General, MBA News

Schools: INSEAD

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