Three years ago, the highly respected Harvard Business Review (HBR) launched what was considered the most accurate ranking of chief executives around the world. They used a comprehensive, rigorous and well-researched matrix to come up with the list of the 100 best CEOs globally. The list appears in their January-February issue and this year?s ranking has some surprises regarding the Indians on the list. There are eight of them, which in itself is quite creditable since we are talking of an original list of over 3,000 CEOs from 37 countries, who were researched and number-crunched and analysed before whittling it down to the final 100.
The eight Indians comprise a motley group, with the only connection being that they presided over corporations which performed exceedingly well in an exceedingly adverse global climate. Incidentally, three of the Indian CEOs head, or headed, public-sector corporations.
Topping the list of Indians is YC (Yogi) Deveshwar of ITC, who ranked seventh overall. Next is the late Subir Raha of ONGC, who ranked 13th, ahead of Mukesh Ambani (28th), who controls India?s most valuable private-sector entity, Reliance Industries. Engineering giant Larsen & Toubro?s AM Naik was 32 followed by AK Puri of BHEL at 38. The telecom industry?s poster boy, Sunil Bharti Mittal, ranked 65, while Naveen Jindal was at 87. The last Indian sailing into the list was VS Jain of Steel Authority of India. As individuals, they have very little in common. Deveshwar is genial, affable and sociable in the mould of Calcutta?s original ?boxwallas?. ITC also has this unique old-boy culture. Mukesh Ambani, for all his clout and stature, prefers to stay under the radar and it?s largely his wife?s influence that increasingly sees him at non-corporate events. Sunil Mittal is a workaholic and fitness freak, always serious and stern-looking, even at social events, which he detests and rarely relaxes except when he?s at home. Jindal is the flag-waving industrialist-politician who is as comfortable on polo grounds as he is at a political rally or a high society soir?e. The public-sector heads generally act like faceless bureaucrats which makes it difficult to assess their real contribution to the corporations they head.
However, the HBR survey is considered the most comprehensive and objective ranking of global CEOs? performance and one criteria used this time was to assess the long-term performance of each CEO based on not just how much total shareholder returns had changed or the overall increase in market capitalisation, but also how they reflected the global nature of business. Fittingly, the number one-ranked living CEO is Amazon?s Jeff Bezos. The online retailing giant has added $111 billion in market cap since 2010. Reflecting the global economic crisis, there have been major changes in the top 100 since 2010. This year, 43 CEOs are new to the list. While HBR did examine a larger, more international sample of CEOs, the majority of newcomers to the top 100 are from emerging markets.
Beyond that, the survey looks at another parameter that has assumed importance: corporate social responsibility or CSR. Globally, it?s now pretty well established, but less so in India, where shareholders still reign and ?stakeholders?, the larger community impacted by a corporation?s performance, play second fiddle. That is changing. CSR is increasingly being integrated into business models as companies strive to make a positive impact through its activities on the environment, consumers, employees, communities, and other members of the public who may be affected by the company?s actions, expansions or even products. The survey found a greater percentage of CEOs delivered great financial performance and also performed strongly on social and environmental dimensions. These trendsetting CEOs are the new role models for leaders pursuing the paradigm of creating shared value.
Overall, the survey throws up some intriguing patterns. China?s growth miracle of the past decade is not reflected. The opposite is true. Among the 3,143 CEOs analysed, the average rank of Chinese executives was 176 places lower than the average rank of the US or European executives. Only three Chinese companies? CEOs made the top 100, though 17% of all the executives studied were from China. Brazil is a different story. Their CEOs make up only 4.5% of the total sample, but 9% of the top 100. Another standout is Mexico, whose average CEO ranked 108 places higher than the average US CEO. There are no clear patterns that separate CEO performance by country, region or most other parameters.
Only two women made it to the list, which is reflective of male-dominated boardrooms across the world. Overall, only 1.9% of all the CEOs studied in the survey were women. Despite the economic downturn, luxury fashion brands did well, and included companies such as Coach, Inditex (Massimo Dutti, Zara, etc) Christian Dior, Herm?s and Nordstrom. Equally contradictory: despite holding six of the top 10 slots, US CEOs performed on average lower than their Latin American, Indian, and British counterparts. The bottomline? The world of CEOs is anything but flat.
The writer is Group Editor, Special Projects & Features, ?The Indian Express?