CEO activism doesn’t factor directly into our rankings, but it may be captured indirectly in ESG ratings, which account for company lobbying expenditures, the degree of disclosure on issues such as carbon use, and the existence of a sustainability officer at the company’s top level, among other measures.

Among the biggest issues leaders face right now is the global political environment. Two U.S. CEOs who appear on this year’s list hold differing views about speaking out on politics, which they have expressed in recent HBR interviews with editor in chief Adi Ignatius. Satya Nadella, of Microsoft, believes in taking a stand on issues that are directly relevant to his company’s business but not in voicing his personal political beliefs. “Taking a political stance [is]…not what our employees expect of me,” he says. In contrast, Jamie Dimon, of JPMorgan Chase, says, “If you want the right public policy….[y]ou need to talk about tax policy, trade, immigration, technology.”

HBR’s approach to measuring performance, as well as the unwavering leadership style of these CEOs, accounts for this consistency. Our ranking takes the long view: It’s based primarily on financial returns over a CEO’s entire tenure—and these executives have been in the role for an average of 16 years. It also factors in each company’s rating on environmental, social, and governance (ESG) issues.

Steadiness and stability—important virtues in turbulent times—characterize the 100 CEOs on HBR’s list of top chief executives for 2018. Of those 100 men and women, 70 were on last year’s list. Over the past five years, 23 have appeared three times, 17 have appeared four times, and six have appeared five times: Jeffrey Bezos, of Amazon; Pablo Isla, of Inditex (ranked number one for the second year running); Blake Nordstrom, of Nordstrom; Paolo Rocca, of Tenaris; James Taiclet Jr., of American Tower; and Renato Alves Vale, of CCR.

In turbulent times, steadiness and stability can be significant virtues. These qualities are evident in the 100 men and women who’ve achieved a spot in HBR’s 2018 ranking of the world’s top-performing CEOs. They face an array of outside forces—savvy competitors, demanding customers, profit-hungry investors, political and economic headwinds. Nonetheless, their companies have shown a remarkable ability to sustain momentum: Seventy of the 100 leaders in last year’s ranking performed well enough to achieve the distinction again this year—including Pablo Isla, of the Spanish fast-retailing giant Inditex, who repeats as the number-one-ranked executive.





This consistency is the result not just of an unwavering leadership style but of the way HBR measures performance. In a business world that often seems obsessed with today’s stock price and this quarter’s numbers, our ranking takes the long view: It’s based primarily on financial returns over each CEO’s entire tenure—and because these CEOs have been successful, many have enjoyed a long run in the job. (CEOs on the list have been in the position for an average of 16 years, versus an average in 2017 of 7.2 years for S&P 500 CEOs.) To calculate the final rankings, we also factor in each company’s rating on environmental, social, and governance (ESG) issues.

Methodology & Data To compile our list of the world’s best-performing CEOs, we began with the companies that at the end of 2017 were in the S&P Global 1200, an index that comprises 70% of the world’s stock market capitalization and includes companies in North America, Europe, Asia, Latin America, and Australia. We identified each company’s CEO but, to ensure that we had a sufficient track record to evaluate, excluded people who had been in the job for less than two years. We also excluded executives who had been convicted of a crime or arrested. All told, we ended up with 881 CEOs from 870 companies. (Several companies had co-CEOs.) Those executives ran enterprises based in 29 countries. Our research team, headed by Nana von Bernuth and assisted by the coders Onorina Buneanu and Clara Frank and the data programmers Morand Studer and Daniel Bernardes from Eleven Strategy Consultants, gathered daily financial data for each company from Datastream and Worldscope, starting with the CEO’s first day on the job and ending April 30, 2018. (For CEOs who took office before 1995, we calculated returns using a start date of January 1, 1995, because industry-adjusted returns prior to then were unavailable.) We then calculated three metrics for each CEO’s tenure: the country-adjusted total shareholder return (including dividends reinvested), which offsets any increase in return that’s attributable merely to an improvement in the local stock market; the industry-adjusted TSR (including dividends reinvested), which offsets any increase that results from rising fortunes in the overall industry; and change in market capitalization (adjusted for dividends, share issues, and share repurchases), measured in inflation-adjusted U.S. dollars. We then ranked each CEO—from 1 (best) to 881 (worst)—for each financial metric and averaged the three rankings to obtain an overall financial rank. Incorporating three metrics is a balanced and robust approach: While country-adjusted and industry-adjusted returns risk being skewed toward smaller companies (it’s easier to get large returns if you start from a small base), the change in market capitalization is skewed toward larger companies. To measure performance on nonfinancial issues, HBR consulted with Sustainalytics, a leading provider of environmental, social, and governance (ESG) research and analytics that works primarily with financial institutions and asset managers, and with CSRHub, which collects, aggregates, and normalizes ESG data from nine research firms and works mainly with companies that want to improve their ESG performance. We computed one ESG rank using Sustainalytics ratings and one using CSRHub ratings for every company in our data set. To calculate the final ranking, we combined the overall financial ranking (weighted at 80%) and the two ESG rankings (weighted at 10% each), omitting CEOs who left office before June 30, 2018. HBR’s list of best-performing CEOs was conceived by Morten T. Hansen, Herminia Ibarra, and Urs Peyer. Previous rankings have been published in HBR in 2010 and annually since 2013; the rankings prior to 2014 utilized different methodologies. Download the Data Behind the Ranking

This focus on career numbers results in a ranking with limited annual churn. Seven of this year’s top 10, and 18 of the top 25, were ranked at those levels last year. In a typical year, from one-quarter to one-third of CEOs in the prior year’s ranking fall off owing to retirement, resignation, death, or poor financial performance. Among the notable names on the 2017 list who failed to repeat are Martin Sorrell, of WPP (who resigned amid allegations of misconduct); John Mackey, of Whole Foods (whose company was acquired by Amazon); and Leslie Wexner, of L Brands (its stock tanked this year).

Other trends remain more or less consistent. In the good news–bad news department, female representation among the 100 CEOs is up 50% from last year—but that’s because this year’s ranking includes three women, compared with just two during prior years. (Here we offer what has become a familiar explanation: The paucity of women in the ranking says nothing about men’s performance as CEOs versus that of women; rather, it’s the result of very low female representation among the CEOs of global S&P 1200 companies, the universe from which our ranking is drawn.)

Although year-to-year shifts in our rankings aren’t dramatic, examining the rankings over longer stretches illustrates the challenge of sustaining world-beating performance. Since 2013 only six CEOs have appeared every year: Jeffrey Bezos, of Amazon; Pablo Isla, of Inditex; Blake Nordstrom, of Nordstrom; Paolo Rocca, of Tenaris; James Taiclet Jr., of American Tower; and Renato Alves Vale, of CCR. Even among this select group, Bezos stands tall: On the basis of financial performance alone (that is, disregarding the ESG component of our rankings), Amazon’s founder has been the top-performing leader each year we’ve compiled the ranking since we began using our current methodology, in 2014. And since Bezos first topped the list, in November of that year, the company’s stock price has grown more than sixfold.

20 of the CEOs lead companies based outside their countries of birth. 32 have an MBA, up from 29 last year. 34 have an engineering degree, up from 32 last year. On average, they became CEO at age 44 and have been in office 16 years. 3 are women, up from 2 last year. 87 are insiders, up from 81 last year.

One of the tests of any leader is how he or she adapts to a shifting environment. Among the biggest shifts companies face right now is in the global political environment. The rise of populism as a potent force is most apparent in the election of Donald Trump and Great Britain’s departure from the European Union, but it’s evident in many other regions, too. For business leaders, especially in manufacturing, this has brought the threat (and sometimes the reality) of tariffs and trade wars, along with industry-specific opportunities and challenges.

Amid such uncertainty, how actively should corporate leaders speak out on political issues—and on which ones? Two U.S. CEOs on this year’s list illustrate differing views.

Satya Nadella succeeded Steve Ballmer as CEO of Microsoft in 2014; that company’s turnaround, led by the growing strength of its cloud-computing business (which Nadella headed before becoming CEO), helped put him at #46 on the 2018 list. Nadella believes in taking a stand on issues that are directly relevant to Microsoft’s business, such as immigration reform, but he draws the line at voicing his personal political beliefs. “No one elected me,” he told HBR editor in chief Adi Ignatius in a 2017 interview. “When we talk about taking a political stance, that’s not…what our employees expect of me.”

Other leaders view this piece of the CEO role more expansively. Among them is JPMorgan Chase CEO Jamie Dimon, who is #22 this year, owing to a sharp run-up in the bank’s stock since 2016. “If you want the right public policy, you have to be an advocate,” Dimon told Ignatius in a 2018 interview. “And you can’t be parochial. You can’t talk only about that one little regulation that’s going to help your company. You need to talk about tax policy, trade, immigration, technology.”

Whether and when CEOs speak out doesn’t factor directly into our rankings—but such activism may be captured indirectly in ESG scores, according to the experts at CSRHub and Sustainalytics, the firms that help us crunch the data. For instance, ESG ratings do account for company lobbying expenditures, the degree of disclosure on issues such as carbon use, and the presence of a sustainability officer at the company’s top level, among other measures. A CEO’s political statements (or lack thereof) may also show up in data gleaned from employee review sites such as Glassdoor. The phrase “CEO activism” connotes proactive behavior by leaders—but more and more often, dealing with political realities is just another facet of a multifaceted job.