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FORTUNE.COM // NOVEMBER 2019
property developer Sunac China—in a “higher uncertainty zone”;
though they score well on our vitality analysis, each faces specific
circumstances that threaten to potentially change its trajectory.
A CLEAR OPPORTUNIT Y
WE FOUND STRONG EVIDENCE that diversity is one of the factors that
predict future growth—underlining the idea that diversity is a
business imperative as well as an ethical one. Future 50 companies
have notably more gender-diverse executive teams: According
to BCG Henderson Institute analysis, 24% of executives at the
Future 50 companies are women, compared with 18% at other
large companies. Furthermore, nine of the 50 companies that
made this year’s list have at least 40% female executives (including
Alexion Pharmaceuticals at 56%), a level matched by only 4% of
large companies more broadly.
One glaring pattern emerging from our analysis is the paucity
of gender diversity at the very top of the corporate world—only
3% of all large global companies are led by women.
Three of this year’s Future 50 companies (Ctrip, Accenture,
and CDW) have a woman CEO, while a fourth (Longfor Group
Holdings) is led by its female chairperson and cofounder, and
a fifth (Wuliangye Yibin) doesn’t have a CEO at all but has a
woman in its top executive job, as president.
There is an obvious opportunity for future-oriented compa-
nies to boost their vitality by further increasing their gender
balance—especially in the corner office.
GLOBAL PAT TERNS OF CORPORATE VITALIT Y
NEARLY HALF of this year’s list is new, but once again more than 80%
of companies are based in the U.S. or Greater China. This duopoly
is in line with recent trends: 86% of the fastest-growing large com-
panies over the past five years have come from these two regions.
However, the balance has shifted: Whereas an equal number of
U.S. and Chinese companies graced last year’s list, this year’s has
28 from the U.S. and 16 from China, perhaps a reflection of growing
concerns among analysts about the strength of the Chinese economy.
More than half of our Future 50 is in the technology or com-
munications sector. As regulatory scrutiny and cash flow concerns
mount, some tech players may be derailed. But in aggregate, our
index indicates that tech potency will continue to be a major
growth driver. At the same time, industry is hardly destiny: Sector
alone explains only 10% of performance, and the top 50 represent
industries as diverse as real estate, transportation, and retail.
In other words, no matter what market they play in, all com-
panies have the opportunity to maintain or restore vitality. We
believe forward-looking measurements, such as this index, can
help them do so.
Martin Reeves is a senior partner at management consulting firm
BCG and chairman of the BCG Henderson Institute.
TO IDENTIFY THE FUTURE 50, BCG examined more
than 1,000 publicly traded companies with at least
$20 billion in market value or $10 billion in revenue
in the 12 months through the end of 2018. (See
Fortune.com for more details.)
Here’s how the ratings are determined: 30% of
a company’s score is based on market poten-
tial—defined as its expected future growth as
determined by financial markets. This is assessed
by calculating the proportion of its market value
that is not attributable to the earnings stream
from its existing business model.
The other 70% is based on a company’s capac-
ity to deliver against this potential. This score
comprises 19 factors, selected for their ability
to predict growth over the following five years,
which fall into four categories:STRATEGY
Our A.I. algorithm relies on natural language
processing to detect a company’s strategic
orientation from its SEC filings and annual reports.
We assess the clarity of a company’s strategy
from earnings calls. We also assess a company’s
commitment to sustainability from its governance
rating by Arabesque, a data-analytics firm.TECHNOLOGY AND INVESTMENTS
A company’s capital expenditures and R&D (as a
percentage of sales) measure its investment in the
future. Technology advantage is assessed through
the growth in a company’s citation-weighted pat-
ent portfolio and that portfolio’s digital intensity
(share in computing and electronic communica-
tion). To account for external innovation, a com-
pany’s portfolio of startup investments and ac-
quisitions is compared with the best- performing
global venture capital funds.PEOPLE
The value of youthful and focused leadership is
assessed by the age and stability of a company’s
executives and directors and the size of its board.
The company’s diversity is assessed by its share
of employees and of management that is female,
as well as the geographic backgrounds of its
directors.STRUCTURE
A company’s age and (revenue-based) size are
correlated with vitality loss. But three-year and
six-month sales growth are predictive of future
growth as signs of revitalization. Companies with
negative cash flow from operations over the prior
three years on average, indicating elevated perfor-
mance risk, were excluded from the ranking.