In an article by former serial (10 times!) CEO, Stephen Kaufman, in the HBR (October 2008, p.52), he describes a much more complete method to evaluate CEOs other than just a few financial metrics. His system, developed when he was CEO at Arrow Electronics, involves each board member actively interviewing and observing firsthand the CEO at work, especially rating her or him in the following 5 areas:
1. Leadership: How well did the CEO motivate and energize the organization, and is the company’s culture reinforcing its mission and values?
2. Strategy: Is it working, is the company aligned behind it, and is it being effectively implemented?
3. People management: Is the CEO putting the right people in the right jobs, and is there a stream of appropriate people for succession and to support growth goals.
4. Operating metrics: Are sales, profits, productivity, asset utilization, quality, and consumer satisfaction heading in the right direction?
5. Relationships with external constituencies: How well does the CEO engage with the company’s customers, suppliers, and other stakeholders?
A pretty good set of dimensions for any CEO or senior executive in a company.
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