Questioning the substance of “We know Best” and credentialism
An elite pedigree — the type of pedigree favored by headhunters and corporate boards — is not predictive of superior management. One of the central rationales for Jensen’s campaign (increasing CEO pay by tying it to share price performance) appears, in retrospect, to have little empirical support. These credentials, however, are significantly overrepresented in the CEO biography database. The elite credentials thus benefit the individual, but there is little evidence that these credentials benefit shareholders.
It’s unclear precisely why the evidence suggests that highly credentialed CEOs from our most elite MBA programs and their funnel careers, like banking and consulting, appear to add no measurable value to shareholders. However, we found wisdom in a saying of the oldest living CEO, a 100-year-old billionaire from Singapore who still goes to work every day to mentor his son in leading the firm. His son, Teo Siong Seng, said, “My father taught me one thing: In Chinese, it’s ‘yi de fu ren’ — that means you want people to obey you not because of your authority, not because of your power, or because you are fierce, but more because of your integrity, your quality, that people actually respect you and listen to you.”
Related: “The data clearly indicate that being able to read is not a requirement for graduation at (Madison) East, especially if you are black or Hispanic”
