Good morning.
I’m back from a two-week rafting trip through the Grand Canyon—which I highly recommend—where I was offline for the longest period in my professional life. Instead of mulling news about Modi, Macron or Trump, my son and I debated the leadership of Gilgamesh, an arrogant and powerful Sumerian king whose mythic efforts to conquer death were chronicled in an epic written 4,000 years ago. What redeems him, I think, is his transformation from pursuing longevity to building a legacy.
I thought of that when Fortune partnered with Indiggo to publish the fourth annual ROL100® ranking that measures the so-called “ReturnOnLeadership” of the top 100 companies in the Fortune 500. It scores a company’s capacity for execution through its leaders, based on four key drivers—connection to purpose, strategic clarity, leadership alignment, and focused action—and 16 indicators culled from publicly available data. Here’s more analysis from my colleague Lance Lambert.
This year, Nvidia displaced Microsoft to gain the No. 1 spot. The speed of its ascent surprised even Indiggo CEO Janeen Gelbart, who notes that stock price and revenue growth are not inputs in the ranking. “This speaks to the fact that they are building the company of the future, with a clear strategy and a very clear purpose,” Gelbart says.
Nvidia CEO Jensen Huang has also created a culture to reinforce that strategy, organizing the chip company around projects instead of hierarchies to allow for transparency, speed and access, according to Rene Haas, a former Nvidia employee who’s now CEO of the U.K.-based chip designer Arm.
Good leadership pays off. The ReturnOnLeadership Index (+49%) has outpaced both the S&P 500 (+26%) and the Dow Jones Industrial Average (+11%) over the past three years.
Separately, members of the Fortune CEO Initiative met yesterday to discuss the challenge of taking a clear moral stance amid a sustainability and diversity backlash with Bill George. The noted author, leadership expert, and former chairman and CEO of Medtronic has counseled numerous leaders as a professor and executive fellow at Harvard. While much of the conversation was off the record, I’ll share some insights later this week.
George is personally disheartened by what he sees right now. “A lot of CEOs are bowing to public pressure, trying to second-guess what’s out there,” he said. “They’re abandoning their purpose for short-term gains and their values because of external pressures.”
His advice: “Don’t flaunt it but do it. Be pragmatic. But stick to your values and your mission.”
In the long run, as Indiggo’s ranking suggests, that will yield higher returns.
More news below.
Diane Brady
diane.brady@fortune.com
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TOP NEWS
Inside Mars’s sprawling vet operation
Mars, best known for its candy and chocolate, is also a major player in veterinary care. While the company has made pet care products since 1935, it’s more recently gone on an acquisition spree, scooping up 17 vet clinics since 2020. Vet care is a lucrative investment, providing a recurring cash stream from owners looking after their pets. Fortune
BP clamps down on office relationships
BP will require all staff to disclose workplace relationships with their colleagues; previously, the company only required employees to reveal a relationship if they felt it could cause a conflict of interest. Last year, CEO Bernard Looney resigned after the company claimed he had not been fully transparent about a previous workplace relationship. The Wall Street Journal
Musk vs. Apple, again
Tesla CEO Elon Musk says he will ban Apple devices at all of his companies if the iPhone maker integrates OpenAI’s AI programs at the operating system level, which the billionaire calls an “unacceptable security violation.” On Monday, Apple said it will partner with OpenAI to provide access to ChatGPT on its devices, though it promised to protect user data. Bloomberg
AROUND THE WATERCOOLER
Elon Musk says Tesla retail shareholders still back him despite big investors like Norway’s $1.7 trillion oil fund saying they will vote against his pay package by Christiaan Hetzner
Q&A with the author of ‘The Trolls of Wall Street’: Gambling, conspiracies, and the return of Roaring Kitty by Leo Schwartz
The Fearless Fund grant for Black female business owners was ruled discriminatory by an appeals court. Here’s what may happen now by Allie Garfinkle
Booz Allen Hamilton CEO: America needs a whole-of-nation approach in its great power competition with China by Horacio Rozanski
Toyota’s sterling reputation just took a $15 billion hit after the car giant was found falsifying safety tests by Marco Quiroz-Gutierrez
China has a ‘near monopoly’ on many critical minerals. JPMorgan says it could be the next battleground with the U.S. by Will Daniel
This edition of CEO Daily was curated by Nicholas Gordon.
