9. Beyond Shareholder Performance

Investors gauge companies on one criterion: They want the stock to make money for them. A chief executive's role, however, involves a great deal more than that. Money managers and investors have judged leaders solely on this criterion, and too many CEOs were happy to comply.

"The popular notions of what constituted a good CEO over the past decade were entirely connected to shareholder value," said Smith. "Historians are going to consider this profoundly irresponsible."

Executives and corporations have a responsibility to shareholders, yes, but also to customers and employees -- and these three responsibilities are interconnected. A singular focus on shareholders will ultimately cripple a company.

Useem, the Wharton professor and author of "Investor Capitalism: How Money Managers Are Changing the Face of Corporate America," says too many executives have feared upsetting increasingly powerful money managers with one quarter of missed earnings numbers. This led to short-term thinking that often proved harmful to the company. Exhibit A in this group, Useem says: former Lucent CEO Rich McGinn, who would tell the Street what numbers they would get and then tell the sales staff to go get them.

"Money managers didn't appreciate how dangerous a power they had, demanding great annual, then quarterly, performance and then off with a CEO's head if they missed," said Useem.

Some CEOs garner praise for bucking this trend. For instance, Steve Odland, CEO of AutoZone, doesn't offer Wall Street any guidance, in part because he doesn't want employees to become obsessed with meeting numbers craved by money managers and analysts.

10. The System Trumps the Individual

The best CEOs realize and promote the notion that the organization is far more important than the individual who runs it. In all but the smallest companies, it's the system that matters.

Jack Welch is a product of a culture within GE that invests years in managerial development. "Companies and boards often ask me, 'Where's our Jack Welch?'" Khurana says. "I respond, 'What have you done to develop your Jack Welch?"

Harvard's Badaracco agrees, saying the truly great companies rely on systems -- set up and perpetuated by individuals -- that avoid a potentially dangerous reliance on one individual.

"Some rare geniuses have truly penetrating insights that transcend the power of the group," says Harvard's Badaracco. "But there are very few around. I wouldn't bet on having one."