What’s the true test of a leader’s worth? At HBR, we believe it’s the
results he or she produces over the long run. To see who measured up, we
analyzed the performance of the CEOs in the S&P Global 1200 over
their entire tenures and ranked them from best to worst. In this issue,
we reveal who made the top 100. In our analysis, we tracked the
shareholder returns each CEO generated, starting from day one on the
job, along with the change in each company’s market capitalization. We
adjusted the returns for each industry and country, to offset any
increase that was attributable merely to being in a hot market. Then, to
account for the many aspects of leadership beyond financial success, we
incorporated a measure of environmental, social, and governance
performance. For this we relied on the ratings of the investment
research firm Sustainalytics. Our view is that, in an era of big data
and greater transparency, consumers and investors want to understand a
company’s culture and values, not just its share price. And as the
number one CEO on this year’s list, Novo Nordisk’s Lars Sørensen, points
out, the two are inextricably linked. “In the long term, social and
environmental issues become financial issues,” he says. In an interview
with HBR’s editors, the low-key Sørensen shares his thoughts on
counterintuitive strategy, connecting with employees, and managing for a
triple bottom line. [ABSTRACT FROM AUTHOR]