The proliferation of MBAs notwithstanding, corporate management has always been more of an art than a science. And in the wake of the widespread scandals of the past few years, investors are demanding that executives broaden their managerial palettes. Shareholders want superior performance and a good return on their investment, but increasingly they’re asking business leaders to pay closer attention to corporate governance. They’re far from alone in this quest, of course: Regulators and politicians are also pressing for improved ethics.
And corporate chieftains are getting the message. That’s clear from this year’s selection of America’s best CEOs, our second annual look at the most respected corporate leaders in this country, starting on page 38. As Reuben Mark, the renowned head of shareholder-friendly Colgate-Palmolive Co. and a repeat winner in the Cosmetics, Household & Personal Care Products sector, told his board, “Corporate governance is an excellent indicator of corporate health.” Mark and several of the other top vote-getters, including Pfizer’s Henry McKinnell and Praxair’s Dennis Reilley, have not only delivered solid gains for shareholders over the years, they’re also widely seen as role models for other CEOs when it comes to corporate governance.
To be sure, investors still place a high value on performance. Comcast Corp. CEO Brian Roberts was the leading vote-getter in the survey, even though the cable operator has come under criticism for some lax governance policies. Investors have been confident enough in Roberts that they’ve overwhelmingly approved many of the Comcast arrangements -- such as outsize voting control for the CEO -- that watchdogs have criticized. “Structure matters,” Roberts tells Senior Writer Justin Schack, who wrote the article accompanying the list. “But results, quality management and stability are what investors are looking for today.”
Still, one measure of the importance of sound management to investors is the response we received when we asked securities analysts and portfolio managers to express their views: Nearly 1,400 professionals from more than 400 institutions managing about $4.5 trillion in equities answered. Altogether, the voters selected winning CEOs in 62 separate industry sectors. A roster of the winners can be seen on page 43, along with short profiles of nine noteworthy chief executives. For a list of other distinguished CEOs who received votes in our survey, please visit our Web site, www.institutionalinvestor.com.
