Selecting a new CEO is among the most delicate decisions a board of directors will ever face. The selection process is exposed to so many unknowns: personality, integrity, technical skills, and experience. Such intangibles are very hard to assess, let alone compare among candidates. In this evaluation, the education of a candidate may be one of the few pieces of information that is certain: the quality and relevance of that education may be debatable, but the simple facts are known and verifiable. To provide guidance to corporate boards on the validity of that indicator, this report analyzes data on the education of 1,800 individuals who served as CEOs of Standard & Poor’s Composite 1500 companies to determine the effect of education on CEO turnover and firm performance.

What makes a CEO great? Recent history has produced many successful CEOs, with vastly different backgrounds and personalities: Warren Buffett, Jack Welch, and Steve Jobs, to name just a few. As outsiders, we characterize these CEOs as “successful” because of the results they produce. Their companies have created new products, penetrated new markets, and provided substantial returns to investors and other stakeholders. It is easy to define a CEO as a great leader after his or her company has become successful; what is much more difficult is identifying a great candidate for CEO before that success has materialized.

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