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Leadership lessons

It ain't easy being No 1.

It ain't easy being No 1. Just ask Robert Nardelli, who in early January stepped down after six years as the chief executive officer of Home Depot.

Nardelli, a General Electric veteran, had doubled sales and profits at the world's third-largest retailer, but the company's share price languished, and he owned a lavish pay package that would net him $210 million in severance. More critically, as the Wall Street Journal headlined his departure, Nardelli had failed "to understand new demands" on CEOs: chiefly the need to pay closer attention to his shareholders -- and other stakeholders -- leveling with them in good times and bad, acknowledging mistakes and moving quickly to make changes.

That's a lesson other CEOs have learned. In this month's cover story ("Staying Power," beginning on page 30), we once again feature America's best CEOs -- as selected by the country's biggest and most important investors. It's our fifth annual ranking, and only one chief executive, John Chambers of Cisco Systems, has managed to earn top accolades from the investors voting in his industry sector all five years.

It's an extraordinary accomplishment in extraordinary times. These past five years have seen the aftermath of the tech stock bubble's bursting, the tragedy of 9/11, a recession and lengthy bear market, the eruption of one corporate scandal after another and the imposition of legislative and regulatory reforms like the Sarbanes-Oxley Act. Merely to have survived in the corner office during this time is quite a feat. To have led a company to ever greater achievements, and to win, in the process, the resounding approval of your most important constituency, is the mark, we think, of true leadership.

"At a time when more CEOs than ever are stepping down, being voted No. 1 for five years straight is remarkable," notes Senior Editor Justin Schack, who has helped to oversee our CEO ranking since its inception in 2003. "When you consider that during that time Chambers also had to steer Cisco through the depths of the tech bust, it's all the more impressive."

Impressive, indeed. Just ask Nardelli.