The Good CEO: Endangered but Not Extinct

5. Deliberate Leaders

Joseph Badaracco, Harvard University professor and author of "Leading Quietly: An Unorthodox Guide to Doing the Right Thing," says that back in the days when corporate America was on Internet time, the guiding mantra was "ready, fire, aim." Smart leaders, he says, understand that not all decisions require forceful and immediate action; rather, patient and careful executives "buy time" if possible to deliberate on issues where "the right thing" isn't always evident.

6. Strong Boards

When Bernie Marcus, former chairman and CEO of Home Depot, fielded tough questions from audience members at shareholder conferences, he would call upon managers and directors, then and there, to try to determine solutions. He also insisted that board members travel to at least eight stores outside their home state every quarter so they would understand the business -- a stringent requirement that drove some away.

"Every member of a company has some sort of appraisal process, except the board," says Sonnenfeld, whose survey indicates that 25% of CEOs think their boards don't understand the business. Individual investors must hold boards up to their own appraisal process. Call investor relations and ask hard questions about the standards the boards are held to. If the company can't elaborate on what measures and requirements a board is held to, this may be a sign of a disengaged board.

7. Spotlight-Shunners

Here's a shock: Many of the best CEOs haven't been the subject of glossy magazine profiles. In fact, some of them -- such as Colgate's Mark and General Dynamics' Nicholas Chabraja -- shun the spotlight.

While to say getting on the cover of Business Week or Fortune is a CEO curse might be going too far, investors should be wary of executives overly concerned with managing public personas. The myth of the transcendent persona -- the CEO getting credit for all of a company's good fortune -- is a major attribution error and a potential red flag for investors, experts say.

8. Performance

It doesn't matter who is at the helm if the company isn't a strong performer. Murphy says the minimum time frame to examine an executive's performance is seven years. This is a good barometer; however, a Drake Beam Morin study found the average CEO's tenure is now a mere three years, down from 10 years in the late 1980s.

To get an honest gauge of good CEOs, search for companies that have bested the competition over the long haul: Have their earnings, stock and revenue growth as well as return on equity exceeded the rest of the market? Has one person been at the helm, and has this CEO positioned the company for future growth? (TheStreet.com went digging for such CEOs, and has come up with a Good CEO Portfolio: Seven Chiefs Who Earn It.)