What can be learnt from Harvard Business Review's 2015 CEO data set?
As of 2015, the Harvard Business Review has implemented some major changes in the algorithm they use to calculate the world's top CEOs. This year, heavy emphasis is towards the environment, sustainability, and long term financial results. With the smog in the air and climate talks in progress, HBR's ranking system has followed the global focus on sustainability and they have strategically included the environment as a key metric. Perhaps that is why we see such a prominence of American based corporations on the list.
As noted by Zac Stillerman on Advisory.com "Currently, more than half of corporations in the United States have prioritized environmental sustainability in their businesses by offering green products and services, and by requiring environmental data from their vendors and service providers."
With shifts like this towards the focus on green products and services, consumer goods represent the most top 100 CEOs this year representing 13 CEOs. Every industry and CEO is able to make changes towards a more sustainable company, and HBR recognizes this.
My analyzation of the data includes the top countries where the CEOs are located and the industries they work in. To further the analyzation HBR provides the following fields in their dataset.
- ranking
- name
- age
- gender
- company
- start year
- if they are the founder
- insider/ outsider
- the type of degree they hold
- CEO/ Chairman Split
- TSR Rank and %
- Market Cap Change % and rank
- financial rank
- ESG Score and Rank
It is a thorough set of data that allows a hardworking CEO to see what areas are important to focus on.
For The Best-Performing CEOs in the World. Here you can Download the Data Behind the Rankings.
It is a large dataset that takes several key factors into account that measure how and why a CEO is deemed successful. For anyone interested in business, ethics, and finances; this dataset that has tracked each of these CEOs from the first day of their tenures.
Aside from how much their companies are worth and how much their individual net worths are, this data has been well compiled to create a thorough ranking across several different fields.
Since the Harvard Business Review changes their algorithm every single year, I did not include a comparison of the CEO data from previous rankings. However, if they decide to follow up in 2016 with a similar ranking system, it will give data journalists a great opportunity to track the changes and differences year to year.
Looking at the charts provided below, one can view the dominance of the consumer goods, financial services, and health care sectors. Also discovered is the major role of CEO's in America, with 41 of the top 100 making the cut.
So what were the qualities of the top ranking CEO's company this year?
Novo Nordisk achieved a very high ESG (environmental, social, and corporate governance) score!
As noted on AFR.com via Sustainalytics, the company offers insulin at a steep discount to consumers in developing countries.
Well that makes great sense, Lars Sorensen, Novo Nordisk's CEO obviously has a heart of gold, and according to the data, his company is financial successful, and environmentally aware.
It is great to see that HBR values much more than finances when it comes to their ranking system.
However, everyone isn't thrilled about that. Over at Business Standards they are putting together a case against HBR's ranking system. They are complaining that money should matter more! They are upset that the top financial ranking CEO is 87th on the list! However, with a very poor ESG score, Jeff Bezos of Amazon deserves his lower ranking as the world is in dire needs of environmentally sustainable businesses. Caldwell Partners break the ranking system down further to examine the shift in this year's metrics. Mentioning the importance of Novo's triple bottom line philosophy; the company bases its operation on three areas, environmental responsibility, financial performance, and social impact. It seems as if Novo is custom fit to win this competition!
It it very interesting to view cases like this, where the big money players aren't stacking up next to the more aware CEOs.
We have to thank HBR for putting together an excellent ranking system and teaching the world thorough its data, that the environment matters.
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