The New Breed of CEO

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Changing the mindset

One of the few concrete means of measuring our view of leaders — CEO pay — implies that little has changed. It is rising at an even faster rate, and can still be hidden by complicated options schemes. What was 42 times the average worker’s salary in 1980 is 531 times today. “It takes a while for that whole mindset to change,” says governance expert Richard Koppes, noting that compensation committees are now cracking down.

Integrity matters

How do companies find people of integrity? “There’s no pop quiz for ethics,” says Elson. It is also highly subjective, and hard to judge in interviews. That’s why George, now at Harvard, believes “preference should always be given to the internal candidate, whose strengths and weaknesses are well known.” Nell Minow, founder of The Corporate Library, says when a headhunter recently asked her to rank 10 words to describe today’s ideal CEO, her first choice — integrity — wasn’t even on the list.

Companies are getting better at cracking down on lapses in integrity. Minow admits that boards are now finally asking tough questions instead of rubberstamping the wishes of a charming CEO. “You could take extremely capable, honorable people of great integrity and watch them lose 50 percent of their IQ” when they’re on a board, says Minow. It’s similar to telling her kids that if she doesn’t hear about trouble right away, “you are grounded until you die.” She adds, “Boards have to be like that with the CEO,” making it clear they want to hear about trouble right away.

Has the power balance clearly shifted away from CEO dominance? When a few more quietly inspiring CEOs start delivering results, we’ll know for sure.