The four components of each firm were added and totaled, providing a ranking of top decision-making firms in the manufacturing, healthcare and real estate sectors.
[1] However, it is certain that top corporate decision-makers do not engage in regular coin-flipping, and their decision-making processes, even if based on little information, affirm intent. Additionally, randomness and luck are presumed to affect all decisions more or less equally in the end. The best decision-makers are aware of the risks involved and decide in favor of one path regardless.
[2] While currently weak legal compliance regimes do not always ensure that corporate fraud impacts a firm’s bottom line in subsequent years, poor practices on the level of Enron accounting fraud are clear indicators of bad decision-making.
[3] Comparing firms across currencies means that some changes in market capitalization can be partially attributable to changes in the exchange rate.
[4] Some firms have already begun this by reporting diversity statistics of employees and staff beyond reporting requirements. Statistics of this kind, for the corporate board and C-suite all the way down to entry-level staff, have been useful in quantifying and clarifying diversity’s importance in reports such as McKinsey’s “Delivering through diversity.”
[5] For example, Apple’s abandonment of the headphone jack on the iPhone 7 is not a particularly innovative idea — it is not groundbreaking — but it does break strongly from industry norms and is thus bold.