Article: Long-serving CEOs make the best leaders: Study

Leadership

Long-serving CEOs make the best leaders: Study

Longer serving CEOs make the best custodians for their businesses and brands, according to a study by Brand Finance.
Long-serving CEOs make the best leaders: Study

CEOs that are best at providing long-term value to their brand, are also the CEOs that have been in their role for longer, finds a study. 

The average tenure for 250 CEOs considered in the study called Brand Guardianship Index is 7.6 years. The top ten performing CEOs averaged 15.9 years in their role – over twice the Index’s average. While the ten lowest-ranked CEOs averaged only 5 years in their role, finds Brand Finance is a London-based brand valuation consultancy.

Four of the top ten CEOs have been in their role for over 20 years. The number one ranked CEO, Satya Nadella of Microsoft, has been in his role for almost exactly the average amount of time – 7.9 years, but his time at Microsoft now exceeds 30 years; he was an internal appointment and has therefore been groomed for the role.

The longest-serving CEO in the top 250 is Fred Smith, the founder of FedEx. He has been in his role for over 50 years and is at number 76 in Brand Finance’s Index. The second longest-serving CEO is Sheikh Ahmed Bin Saeed Al Maktoum, the man who has been credited with “putting Dubai on the global aviation map”. At number 20 on the Index, he has been Chairman and CEO of Emirates Airline for over 37 years. The longest-serving CEO in the top ten is Jensen Huang of Nvidia, who has been leading the company for almost 29 years.

“Brand guardianship is a skill that needs to be developed. To be able to build the long-term business value you need to balance the needs of different stakeholders - employees, investors, and the wider society. It is clear, from our Index, that that takes time,” said Annie Brown, Associate at Brand Finance.

Seeming to confirm the idea that CEOs that best know both the business and the various stakeholders are the ones that can provide the greatest long term value to the brand, all of the top ten CEOs in the list are founders or internal appointees. The highest-ranked external appointee is Jean-Frederic Dufour of Rolex at number 21 on the list, but as he was previously the CEO of a competitor, Zenith, he already had strong relationships in the industry.

“The best performing CEOs must now work as collaborative diplomats to build the value of the brand and of the business,” continued Brown. “That needs skill, experience and often patience. Boards that demonstrate patience with skilled CEOs will reap the rewards with increased business value.”

“However, that doesn’t mean that CEOs always continue to get better with age. They can reach a ‘sell-by date’,” continued Brown. “Boards – and the CEOs themselves – need to recognise when that time is so they can make changes in the best interests of the brand.”

Ranking the world’s top 250 CEOs, the Brand Guardianship Index evaluates the performance of chief executives according to how well they manage and grow their companies’ brands. The ranking is informed by the results of an original survey of over 1,000 market analysts and journalists. The top 250 ranking is drawn from a sample of over 500 chief executives of the world’s top companies with at least one brand featured in the annual ranking of the world’s top 500 most valuable brands – the Brand Finance Global 500.

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Topics: Leadership, #BusinessTransformation

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