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Worst CEO List, Who's On It?


Exactly what a CEO does can vary from company to company, but generally speaking, we know that they run the place. So when something big goes bad, the top executive should be held accountable.

To hear about some of the biggest blunders by chief executives in the year 2012, we're joined by Sydney Finkelstein, a management professor at Dartmouth College's Tuck School of Business. He puts together this annual list of the worst CEOs and he joined us to talk about them.

Professor, good morning.

SYDNEY FINKELSTEIN: Good morning, David.

GREENE: Well, let's dive right in. Let's get to the top offender of your 2012 list. The worst CEO, according to you from the year, was Best Buy CEO Brian Dunn. Why?

FINKELSTEIN: Well, Brian Dunn has been at the helm of the company for several years and Best Buy has been in a freefall. The stock is way down, their cash is down, their same-store sales are down. And the problem is that people walk into Best Buy, look at the products, look at the TVs and take a few notes and then go home and go on Amazon and buy it at a cheaper price. And the solution that Brian Dunn has tried to come up with has really not worked. He's focused on trying to sell more expensive products, he hasn't tried to fix customer service and he certainly hasn't tried to fix the online part of the business. And unfortunately, to top it all off, he got himself into a bit of trouble in an alleged affair with a 29-year-old subordinate, and that probably was the final straw that broke the camel's back.

GREENE: The icing on the cake in addition to everything else. Has Best Buy done anything right over the last year?


FINKELSTEIN: Well, they did fire him. I guess that's...


FINKELSTEIN: ...that's an appropriate thing to do. And the news about Best Buy, of course, is that the former founder is trying to buy the company now, and that's an interesting development.

GREENE: Well, the next executive to make your list, Aubrey McClendon. Who is that?

FINKELSTEIN: He's the CEO of Chesapeake Energy. He's one of the real champions of hydraulic fracking that has revolutionized the national gas industry in America. He was running a hedge fund, a private hedge fund, not a corporate hedge fund, trading in oil and gas at the same time that he was CEO of the company. I mean, it's an obvious conflict of interest. When he needed to raise some capital himself for his own personal financial dealings, he actually borrowed $500 million from EIG Global Energy Partners, which is a company that is a major financier for Chesapeake itself. Clearly, a significant conflict of interest.

GREENE: And so you mentioned guys on your list. And to be fair, we should say it's not all men. The Avon lady, Andrea Jung, now the former CEO of Avon, spent 13 years at the top of the company. I mean, she was once on Forbes magazine's list of most powerful women. What happened? Why is she on there?

FINKELSTEIN: At one time the market value of Avon was some $21 billion and today it's around $6 billion, so what was going on at Avon has been going on for some time. Andrea Jung's strongest suit, I think, is in marketing and branding and she's very, very talented at that. But when you start to think about what are the challenges for Avon as they expand into China, where it's a big business, you really need much stronger execution skills, operational skills, and that's not something that was always her strongest suit. And that might be one of the reasons why this incredible bribery scandal has erupted, where the company is being investigated by the Justice Department, by the SEC for possible violations of the Foreign Corrupt Practices Act. And Avon has already spent several hundred million dollars in investigating and dealing with that and I think there's still another shoe to drop on it.

GREENE: And Zynga, the game company, their CEO makes your list. Remind us who he is and then tell us why.

FINKELSTEIN: This is Zynga, the company that makes Farmville, that game that we all see on Facebook that our friends and acquaintances torture us on, telling us what they've been up to.


GREENE: Right.

FINKELSTEIN: And so while they have a lot of users still today at Zynga that are using Farmville, fewer and fewer people are paying. There's been a virtual revolving door in the executive suite, one senior executive after another has left. Zynga has been dependent on Facebook for some 90 percent of their revenues which, you know, you never want to get in that position either. Mark Pincus sold a tremendous amount of his stock right after the IPO in a way that made a lot of people concerned about what does he really think about the company. So...

GREENE: He made the choice easy for you.

FINKELSTEIN: ...we'll see what happens in the next year with Zynga.

GREENE: Well, happy new year to you, Professor, and we'll look for your list next year.

FINKELSTEIN: Thank you very much, David. All the best.

GREENE: Sydney Finkelstein is the author of "Why Smart Executives Fail" and "Think Again: Why Good Leaders Make Bad Decisions." Transcript provided by NPR, Copyright NPR.

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