Good morning.
Yesterday’s CEO Daily focused on Carol Tomé—a former CFO (Home Depot) who has already doubled her company’s market value as a new CEO (UPS). But a new study suggests Tomé may be the exception. Spencer Stuart looked at the performance of 1,300 CEOs since the turn of the millennium and found that ex-CFOs generally underperform. The study found that 85% of CEOs fell into one of four categories—former CFO, former COO, former divisional CEO, and “leapfrog” leaders who came from below the second layer of management. The conclusion: “Leapfrog” leaders were the most likely—41.2%—to rank in the top quartile of CEOs for performance. Ex-CFOs were the least likely—7.9%.
Former divisional CEOs turned out to be the safest bets. While they were less likely to overperform than the “leapfrog” candidates, they also were the least likely to underperform of all four groups. You can access the full study here.
Separately, a coalition of 15 major employers are announcing today that they are adopting a rigorous set of 55 criteria to eliminate “algorithmic bias” in their human resource decisions, including recruiting, compensation and employee development. The Data & Trust Alliance was formed last year by former American Express CEO Kenneth Chenault and former IBM CEO Sam Palmisano, and includes American Express, CVS, Deloitte, General Motors, Humana, IBM, Mastercard, Meta, Nielsen, Nike, Under Armour and Walmart.
Yesterday I spoke with Chenault, who said the Alliance was created out of a recognition that “every big company is becoming a data company” and is going to have to wrestle with responsible data use. The Alliance started with HR because “every CEO is focused on talent and the whole talent process, and with automation, there’s a risk that technology can perpetuate bias.” Up next will be criteria for creating responsible personalization, and criteria for doing “new diligence” on data and algorithmic businesses.
I asked Chenault about the inclusion of Meta (Facebook) in the Alliance, given that it is frequently accused of irresponsible use of algorithms. His response: “Our view is that we can get companies to change. There is a major shift happening. The ‘move fast and break things’ era is over.”
You can learn more about the Alliance here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
