The Good CEO: Endangered but Not Extinct

Michael Useem, a professor at the Wharton School, points to eBay CEO Meg Whitman as an example of such a leader -- despite the recent embarrassment of being tarred with the "Goldman IPO Flipping" brush. "She took a 150-person organization with a great business model and quickly modified it to 2,500 employees in four years," Useem says. "She and her senior management have built a culture where employees, customers and investors want to stay at eBay."

2. A Tolerance for Dissent

A company engaged in an internal debate about its future course isn't necessarily in trouble. Good CEOs draw distinctions between dissent and disloyalty and actively engage opposing points of view. PepsiCo, thanks in part to former CEO Roger Enrico, has embraced a tolerance for dissent going down the line, experts say.

Conversely, Hewlett-Packard CEO Carly Fiorina "is the worst I have ever seen on tolerating dissent," says Jeffrey Sonnenfeld, associate dean of the Yale University School of Management. Fiorina's behavior would discourage strong-minded executives from serving on her board and hinders H-P's progress, he says.

3. Straight Talkers

In Webcast and shareholder meetings, does the chief executive invent words to discuss the company's performance or prospects? Does he or she obfuscate straightforward concepts? Do you hear a lot of talk about synergy and visibility and very little on earnings and revenue? Analysts have swallowed a great deal of fancy jargon over the past few years in place of straight talk. Investors should opt for the latter.

4. Personal Dynamism

The Good CEO: Endangered, but Not Extinct

Greenberg's Rules for Recognizing Risk

Institutions Are Asleep at the Wheel

New Rules Can't Cure Ailing Wall Street

Fleecing the Shareholder: How They Do It

Inside, Outside -- We Just Want an Active Board

Rakesh Khurana, author of "Charismatic CEOs" and a Harvard Business School professor, says the singular pursuit of charismatic leaders has led many boards to consider only external candidates who have already achieved a high rank and status -- even if they are wrong for the job. These charismatic personas, even when they boost the company's fortunes as General Electric's Jack Welch did, often destabilize the corporation.

The insistence on "charismatic CEOs" stems from a belief that there's a single person who can solve all problems in a company. This is highly problematic because "it results in a concentration of power, authority and rewards going to one person," Khurana says. "Devotion to CEO rather than company is akin to devotion to a cult rather than a religion -- only one outlasts the charismatic personality."

Nonetheless, most experts say personal dynamism and the ability to inspire employees are vital components of a good executive -- and boards shouldn't be afraid to look internally for these traits. One oft-mentioned CEO who exhibits this kind of leadership is Colgate-Palmolive's Reuben Mark. Executives such as Mark "don't define charisma or dynamism as back-slapping or chasing down the media," Sonnenfeld says. Rather, they inspire their employees with the moral model they set for others.