By Carol J. Loomis
November 21, 2012

This story is from the August 11, 2003 issue of Fortune. It is the full text of an article excerpted in Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012, a Fortune Magazine book, collected and expanded by Carol Loomis.

The golf course has been the stage for some truly high-powered moments in business. Andrew Carnegie was on the links in 1901 when he was persuaded to sell his empire to J.P. Morgan, creating the first billion-dollar corporation, U.S. Steel. John D. Rockefeller was playing his personal 12-hole course when told of the Supreme Court ruling that broke up Standard Oil. A game that took place in mid-July in Sun Valley, Idaho, may not match those two games in historic import, but it may have set a new record for aggregate economic might. The players included the CEO of the world’s largest company, the world’s most successful investor, and the world’s richest man. Picture all that raw clout piled into one battery-powered cart, and you have the right visual to open this, Fortune’s Power Issue.

Singling out “power” for a special issue of Fortune is a bit like Sports Illustrated devoting an issue to “athletics.” Power defines Fortune — it’s what we write about every issue, special or not. Back in 1929, founder Henry Luce was even thinking of naming his new magazine Power. While we’re grateful he passed on that one (as well as Tycoon), Luce was onto something. Business, like golf, isn’t solely about power — sinking those putts counts too — but power is in business’s soul.

People acknowledge power’s presence in ways we’re not even aware of. Put two people in a room, research by Steve Ellyson of Youngstown State University has found, and the less powerful one seeks more eye contact while listening (See, I’m taking in everything you say, boss) and less eye contact while speaking (I’m expressing my thoughts but am not a threat to you). The more powerful one, other studies show, tends to smile less, sits in weirder positions, and does more “steepling.” Touching one’s fingers together in a raised position — Sherlock Holmes and The Simpsons’ Mr. Burns both do it — turns out to be a dominance display that’s most potent “right at eye level,” notes Ellyson, “so one person has to look through the other’s hands.”

It’s difficult to look at Edward Steichen’s 1903 portrait of J.P. Morgan and not think “power” and, probably, “menace.” The famous image, in which the most powerful businessman who ever lived wields a penetrating scowl and what appears to be a gleaming dagger, is a photographic trompe l’oeil: The dagger is the metal handle of his chair, the scowl a fleeting reaction to Steichen’s requests. Yet even knowledge of the illusion doesn’t dilute its force. Here is Morgan — a man who controlled assets equal to two-thirds of the nation’s output and stemmed a 1907 panic by locking 50 bankers in his offices — experienced as an elemental force, his gaze powerful enough to part crowds.

But recognizing power is one thing. Ranking it is another. When Fortune set out to create a list of the 25 most powerful people in business, our goal was simple: to provide a snapshot of who controls the commanding heights of the American economy. Our definition of power was straightforward: the ability to affect the behavior of other people — whether in a company, an industry, or the world at large. The simple part pretty much ended there. We soon came to understand the four immutable laws of the quantification of power.

Law One. Power, like gravity, can’t be observed directly. Only its effects can. If, for instance, your corporate name is popularly used as a verb (“Have you Googled him yet?”), it’s an indication you have some power, but not proof positive. If it shows up in Eminem’s lyrics (“I watch TV/and Comcast cable”), you’re getting closer. If you’re able to get Jack Grubman’s kid into Manhattan’s 92nd Street Y — now we’re in top 25 territory.

Law Two. Absolute power, though it may corrupt absolutely, doesn’t exist in business. Instead, everyone exerts power over someone else. The CEO who looks and acts like a captain of industry often turns out to be a captive — to Wall Street, to pensions, to lawyers, and especially to the CEO’s own workers. The power that subordinates hold over their bosses, notes West Point leadership professor Col. Thomas Kolditz, is routinely underestimated. “I was interviewing Iraqi prisoners of war,” he relates, “and most of them said that if their bosses had tried to make them fight, they’d have shot them.”

Law Three. Power flows from a variety of sources, as Samson (hair), Popeye (spinach), and Mao (barrel of a gun) could have told us. There are those who are powerful among the Powerful — Rasputins, headhunters, and Herb Allens — and those who change the behavior of the masses (Starbucks’ $3 coffee). There’s the power of the disrupter — the Napster that throws the game board in the air just as your hotels on Boardwalk were making money — and the power of the chokeholder, who exacts tribute from all who pass through his Gates. Then there’s that indirect form of power known as “influence,” which is how Steve Jobs manages to punch above his company’s relatively puny weight.

Law Four. Comparing Apples to Microsofts ain’t easy, which makes for a lot of highly spirited debate. (Also: fist banging.) It’s like a game of rock-scissors-paper — rocks smash scissors, scissors cut paper, paper covers rocks. Which object is best to have? Well, is the most powerful person: (1) the megacompany CEO whom 100,000 employees salute as boss, (2) the bond trader who cuts the megacompany’s value in half whenever he blows his nose, (3) the economist whose ideas subtly dictate the bond trader’s moves, or (4) Lockheed Martin (LMT) CEO Vance Coffman, who has enough air power to ionize all of the above? Rock, scissors, paper, Hellfire missile.

Picking through these intricate layers, one begins to see that the chest-thumping, Zeus-with-a-thunderbolt notion of power is merely the cartoon version. “It’s an art form,” says the historian Robert Caro, “a type of genius that’s different from any other type of genius.” Caro’s two massive biographies — of Lyndon Johnson and New York’s master builder Robert Moses — are among the most nuanced studies of power ever written. Both men were ruthless in their pursuit of it; Johnson as he ascended to leadership in the Senate, Moses as he tore up whole swaths of metropolitan New York for his roads and bridges. And yet their methods were different entirely. Johnson, notes Caro, “saw every man as a tool,” using the magnetism of his personality to pull people close enough to find their weakness; once grasped, the weakness became the tool’s handle. The misanthropic Moses — who hated to be touched — couldn’t see the leverage points in men’s psyches but worked the leverage points in New York’s political system so single-mindedly that for 40 years and five mayors, he was untouchable. Caro recalls watching Moses stand with his pencil before a giant map of New York: “He was like an artist painting an entire urban and suburban region — one with 21 million or 22 million people — and seeing it as a single canvas. But of all the paints he used to paint that canvas, the most important was power. Without that, none of it would have worked.”

Caro’s main point: “The acquisition of power is a creative act.” It was a cliché that no one could lead the Senate; LBJ created a way to lead it. It was a cliché that New York was ungovernable; Moses invented a way to govern it. For that matter, it was a cliché that nobody could make money in the computer business; Michael Dell found a new way to do it.

After several rounds of internal debate about our power list, two things became clear: first, that power is a really deep topic; second, that any list we published would provoke the same howls of protest and counterprotest that filled our offices. (“How can the CEO of Pfizer not be in the top ten?!”) And yet in one area a strange civility broke out: When it came to deciding the list’s highest slots, there was something close to unanimity. In fact, we’d narrowed the top three contenders to the trio who, coincidentally (hand on the Bible here), were set to play golf in Sun Valley.

We had our three biggest fish. That left the question: Who’s the kingfish?

There’s no debating who runs the most powerful company. Lee Scott’s Wal-Mart is reshaping about 20 industries at once and would probably qualify for a spot on the UN Security Council if that body’s membership weren’t limited to “countries.” Yet Scott may also be the most replaceable of the three. Bill Gates, as lead brain in a company powered by brainpower, is still Mr. Microsoft — and as Huck Finn might have said, he’s got a powerful lot of green matter to go with his gray. Yet the company’s $46 billion war chest is only potential, unrealized power unless it finds new behavior-changing ways to use it. Lately Microsoft has been parceling it out to investors as dividends.

Which brings us to our third golfer. Besides overseeing an empire known as Berkshire Hathaway, Warren Buffett has his finger in a lot of important pies (Coca-Cola (KO), Gillette, the Washington Post Co. (WPO)) and a personal fortune second only to Gates’. But the most arresting fact about Buffett may come from a recent Duke University survey of graduating MBAs: After their own father, the person the graduates admire most — more than the President, more than the Pope, more than Gandhi — is Warren Buffett. That remarkable stature gives him a power of moral suasion that’s been made all the stronger by his sparing use of it. It’s the ability to shape the behavior of people far beyond his direct reach merely through his words, and it’s added to Buffett’s image as American capitalism’s unofficial Lord Protector.

He’s got the rock, the scissors, and the paper. And now he’s got something else: the top spot on our list. —Jerry Useem

And now, for our list of the 25 most powerful people in business:

No. 1 Warren Buffett
Berkshire Hathaway (BRKA)

The most powerful businessperson in America is famously understated about his station in life. Sure, Warren Buffett enjoys some of the trappings that come from being the second-richest man in the world, such as winging around in one of his Netjets and playing bridge with pal (and No. 2 on our list) Bill Gates. Mostly, though, the 72-year-old brushes aside the notion that he is the Atlas of American business. “It really just means that if I do something dumb, I can do it on a very big scale,” he says with his trademark chuckle. “It means you could add a lot of zeros to the losses.”

There haven’t been many of the latter. Buffett’s company, Berkshire Hathaway, has become an all-American juggernaut, with multibillion-dollar interests in everything from insurance — where Buffett is one of the world’s leading players — to newspapers, carpets, and cowboy boots. In racking up compound annual returns of 21% over the past 15 years (vs. the market’s 11%), Buffett has proved himself the world’s greatest investor. As such, his influence on stocks and the market is unparalleled. Word that Buffett is buying or selling certain shares (be it fact or fiction) will move a stock like a pinball, which is why he is extra-guarded when it comes to discussing investments.

One of the few places where he does talk about investments — his annual letter to shareholders — is far and away the most widely read communication from a CEO in the world. When former Chinese President Jiang Zemin discussed the mystifying nature of the U.S. stock market with a visiting Bill Gates, Gates told him that there was really only one guy who understood it: Warren Buffett. Gates added that when he got back to the U.S., he would send Buffett’s most recent annual report to him. Which he did. (No word on whether Jiang is now long BRK.)

What’s more, Buffett is without question the world’s most sought-after businessman by other CEOs who want guidance. “CEOs are surrounded by people who are getting paid,” says Buffett. “I’m getting nothing, so I can give them unbiased advice.” Over the past five years dozens of CEOs have come to Omaha to visit the sage, including General Electric’s Jeff Immelt (No. 7 on our list). “I’ve been there two or three times to speak with him and have a steak,” says Immelt. “He’s the world’s most astute investor, and I’m trying to pick his brain.”

The U.S. Congress hangs on Buffett’s words too. On May 20, just days before lawmakers voted on the Bush tax bill, Buffett wrote an op-ed piece in the Washington Post that pointed out what he perceived as the folly of eliminating taxes on dividends. The tax cut, Buffett argued, would mostly benefit the wealthy. Powerful stuff coming from Buffett — powerful enough to persuade certain members of Congress to water down the final version of the tax cut.

Quite simply, Buffett is respected and admired more than any other businessperson alive, not only by others in business but by the general public as well. Now that’s power. —Andy Serwer

No. 2 Bill Gates
Microsoft (MSFT)

 While Microsoft’s chairman and co-founder is no longer CEO, he remains the world’s richest man (estimated net worth: well over $30 billion) and as chief software architect, he wields enormous power over how our computers behave. But it is his business acumen that gives Gates, 47, the most clout. More than anyone, he changed the economics of IT by creating software and hardware standards that transformed computers into commodity products. Along the way he achieved an effective monopoly in Microsoft’s primary business of operating systems software, and he weathered the most aggressive federal antitrust challenge in decades. Now he’s out to change the world another way: by throwing billions at eradicating infectious diseases. —Brent Schlender


No. 3 Lee Scott
Wal-Mart (WMT)

 Power isn’t a word you’ll hear much around Wal-Mart. Huge concentrations of it scare people, and any superpower seen to be throwing its weight around is apt to lose some of it. Lee Scott (right) seems to understand this. But despite his studiously low profile, the CEO of America’s biggest company (No. 1 on the Fortune 500 list, with $247 billion in sales and nearly 1.4 million employees) can’t help but be a powerful man. True, he’s more the channeler of Wal-Mart’s power than its source. It was founder Sam Walton (above left) and successor David Glass (center) — the other two-thirds of retailing’s holy trinity — who built the machine and the culture underlying it. But if you’re at the controls of the biggest starship in the galaxy, you are, by definition, a Master of the Universe. —Jerry Useem

No. 4 Sandy Weill
Citigroup (C)

He has orchestrated some of the biggest mergers in history, making Citigroup the world’s largest financial services firm ($1 trillion-plus in assets, market cap of $231 billion). And though Weill has decided to step aside as CEO next year, he’s kept the chairman title, made his right-hand man his replacement and will maintain a firm grip on the company until he leaves for good in 2006 — make that if he leaves for good then. Under Weill, Citigroup has become the king of one-stop shopping, consistently topping its peers in lending, underwriting, and M&A advising. Weill and Citi have come under tremendous regulatory scrutiny, but he still attracts a powerful crowd. He recently threw himself a 70th-birthday party at New York City’s Carnegie Hall. The event drew a mayor, a governor, a Senator, and an ex-President. —Julie Creswell

No. 5 Rupert Murdoch
News Corp. (NWSA)

His Fox TV network, which airs American Idol, is on a tear. His Fox News channel has a larger U.S. audience than CNN. Murdoch, 72, has shaken up markets from satellites to newspapers wherever in the world he has entered them. The authoritarian CEO doesn’t practice or even feign impartiality; he has made his sons his successors, and he zealously uses his properties to disseminate his own conservative agenda. Since his recent acquisition of DirecTV, Murdoch has the power to beam News Corp. content into hundreds of millions of homes. Opponents of the FCC’s move to relax media ownership restrictions made Murdoch the focal point of their campaign. As CNN founder and archrival Ted Turner has declared, “He’s the most dangerous man in the world.” —Nicholas Stein

No. 6 Lee Raymond
Exxon Mobil (XOM)

Lee Raymond isn’t offering any apologies. He’s not talking up green fuels, rhapsodizing about alternative energy in the year 2063, or waxing environmental about how his company will help solve the problem of global warming. What this man does is sell oil — and make money, lots of it, for shareholders. In the first quarter of 2003, Exxon Mobil earned $7 billion, more than twice what Microsoft and GE earned in the same period. Raymond’s power goes beyond the numbers. For ten years the 65-year-old has run a company that functions virtually as a nation-state, hammering out deals with countries all over the globe (and drawing criticism for dealing with unsavory regimes in places like Angola and Indonesia). But with Exxon Mobil having regularly beaten the S&P 500 over the past 15 years, and poised to turn in a banner 2003, Raymond may never to have to say he’s sorry. —Nelson D. Schwartz

No. 7 Jeff Immelt
General Electric (GE)

When Jack Welch retired in 2001, Immelt won one of the toughest succession battles ever to become the ninth CEO of the hugely respected 125-year-old corporate giant, beating out such rivals as Bob Nardelli (now CEO of Home Depot (HD) and Jim McNerney (CEO of 3M (MMM)). Immelt has big shoes to fill, and he has been dealt a tough hand. But he has gracefully coped with problems from a choppy economy to Wall Street demands for greater transparency. He ditched misfits like GE’s Japanese life insurer and divided the once-opaque GE Capital into four units, appeasing investors. Meanwhile, he has maintained the strength of key businesses like NBC, which reaches 6.2 million viewers every morning — more than any other network — and snagged the U.S. rights to air the 2010 and 2012 Olympic Games. All this, and he’s only 47. That means he has 18 years to catch up to Jack before hitting GE’s traditional retirement age. —Julie Schlosser

No. 8 Michael Dell
Dell Computer (DELL)

Larry Ellison personally endorses his products. Carly Fiorina and Sam Palmisano wish he’d quit working so hard. In the 19 years since Dell, 38, founded Dell Computer in his University of Texas dorm room, he has exploited the Net and just-in-time manufacturing to fundamentally reshape a commodity business. He has proved that anything his competitors can do, he can do cheaper. Dell — whose net worth is estimated at more than $17 billion, making him by far the richest self-made American under 40 — sells more PCs and workstations than anyone else. No wonder his methods are studied across industries and around the world. —Noshua Watson

No. 9 Hank Greenberg

Greenberg has been at the helm of AIG for 36 years. He built it into the world’s largest insurance company: AIG’s net income last year was more than that of the top 18 U.S. property-casualty firms combined. Though he’s 78 now, Greenberg has hardly slowed down. In 2001 he single-handedly hung up China’s entry into the WTO until he won his company an exemption on foreign-ownership rules. (“He’s one of the only people who can knock on the door of the Premier of China and have the guy answer it,” says an analyst.) That same year he outmaneuvered Prudential U.K. to snag life insurer American General for $23 billion. Now he’s tackling the tort system, lobbying Congress to restrict the size of plaintiffs awards. Don’t bet against him. —J.C.

No. 10 Bill Gross

The Bond King moves markets. As founder and chief investment officer of money-management firm Pimco, Gross, 59, controls $360 billion in fixed-income assets — more than anyone else on the planet. His Total Return mutual fund is bigger than Fidelity Magellan. Despite that girth, Gross nimbly plays global debt markets. Much of the financial world follows his every move — though usually a step or two behind. Merely a rumor that he is selling or buying a sector can create a frenzy. His public criticisms of the way companies like General Electric use debt have sent stock prices plummeting. And his predictions that bonds will give stocks a run for their money over the next decade have lured hordes of investors to the sector. It’s completely understandable that they’d listen to this soft-spoken, yoga-practicing Californian: Gross has made money for clients in 27 of the past 30 years. —David Rynecki

No. 11 Hank McKinnell
Pfizer (PFE)

McKinnell, 60, is the corporate world’s surgeon general. As CEO of the globe’s largest drug company (Pfizer now has the third-largest market capitalization after Microsoft and GE), this powerful lobbyist holds sway over the world’s medical-research agenda. McKinnell is exceptionally good at making revenue-enhancing deals too. He brought about Pfizer’s $84 billion merger with Warner-Lambert in 2000 and $60 billion acquisition of Pharmacia in 2002. When it comes to power, he says, he likes to push it down the ranks. “Quite often I’m asked, ‘What are we going to do about this or that?’ My response is ‘Understand the vision and values of the organization. Then you figure it out.'” —John Simons

No. 12 Franklin Raines
Fannie Mae

His résumé is enough to inspire old-fashioned awe: Harvard undergrad, Rhodes scholar, Harvard Law, Lazard Frères partner, board member at Pfizer, PepsiCo (PEP), and AOL Time Warner, stints in both the Carter and Clinton administrations — including one as director of the Office of Management and Budget at that magical (and fleeting) moment when the nation’s accounts moved from deficit to surplus. But that’s not why Raines is on this list. Nor is he here because he’s a particularly glamorous, dynamic, attention-grabbing CEO. Says the man himself: “What is it — a top 25? I should be 26.”

No, the 54-year-old makes the cut because he runs Fannie Mae, the government-agency-turned-corporate-juggernaut that is the heart of the American economy. Fannie Mae, with its $924 billion in assets, is the nation’s second-largest financial institution, trailing only Citigroup. More to the point, it dominates the mortgage market that has kept the U.S. economy afloat for the past two years. By buying mortgages at a record pace, Raines and Fannie helped bring rates down to their lowest level in 40 years. That kept the housing market going strong and stimulated an unprecedented wave of refinancing that pumped hundreds of billions of much-needed dollars into the economy. What’s more, Raines has successfully staved off new regulation in the wake of recent accounting difficulties at Freddie Mac, Fannie’s younger brother. That may be, in the end, the best explanation of Franklin Raines’s power. Official Washington is afraid that, if it messes with his company, it will destroy the housing market and with it the U.S. economy. How many other CEOs can say that? —Justin Fox

No. 13 Sam Palmisano

He dissolved a clubby 92-year-old executive-management committee, asked the board to cut his bonus and redistribute the money to others, and reached far down the organizational chart for fresh ideas. That might sound like a corporate fairy tale, but in fact it’s a few pages out of the first chapter in Sam Palmisano’s tenure as CEO of the $81 billion behemoth. The 30-year company vet — who took the reins early last year — isn’t resting on predecessor Lou Gerstner’s laurels. Instead, he thrives on shaking things up. Palmisano, 52, has snatched up PricewaterhouseCoopers’ consulting arm for $3.5 billion, helping shift Big Blue’s focus from selling hardware and software to selling IT and consulting services. He has also promised to revolutionize the IT world with “on-demand” technology. If only sales and stock performance were better. —J.S.

No. 14 Craig Barrett
Intel (INTC)

Computers built with his company’s semiconductors are changing modern life more than any other product. What’s good for Intel, one might say, is good for the world. And in chips, where $27-billion-a-year Intel is by far the dominant force, CEO Barrett is the undisputed industry heavyweight in a way his illustrious predecessor Andy Grove never was. While Intel once merely built chips for PCs, Barrett, 63, is moving it toward powering all the world’s computers. When his company embraced Linux, that operating system became a bigger threat to Microsoft. Rare is the head of state who hasn’t lobbied him. Each year Barrett visits 30 countries; in many he’s a top employer. His legendary one-hour-of-sleep stamina leads staffers to call those trips “death marches.” But few work harder — and with more impact — to keep the world’s economy alive. —David Kirkpatrick

No. 15 A.G. Lafley
Procter and Gamble (PG)

Since taking over P&G in 2000, this 56-year-old former Navy man and company lifer has quietly skippered the $43 billion colossus back to profitability. But you won’t hear him constantly bragging about it. Lafley’s unassuming mien, openness, and authenticity have endeared him to Wall Street and employees alike. “Despite his doing nothing to create it,” says CEO guru Jeffrey Sonnenfeld, “a sudden mythology has grown up around him that’s almost Jack Welch-like.” That might explain why he sits on the boards of two of the five largest companies in the country (General Motors and GE). His real power is in his reach. Five billion people across 130 countries use the nearly 300 brands he controls, including Tide, Pampers, and Crest, two billion times a day. This year Lafley is ramming home the $7 billion acquisition of German hair-care giant Wella, the largest in company history. —Matthew Boyle

No. 16 Ken Lewis
Bank of America (BAC)

This low-key 56-year-old possesses a simple but vitally important kind of power: the power to make money. Lewis is a new-breed CEO. He doesn’t grandstand. He just quietly focuses on wringing profits out of the megabank (the third-largest commercial bank in the country by assets, behind Citigroup and J.P. Morgan (JPM)) that his larger-than-life predecessor Hugh McColl created in a binge of acquisitions. BofA’s stock has appreciated 51% since Lewis’s arrival in April 2001. He grew earnings 23% last quarter by driving big gains in mortgage and credit card banking. And he’s brilliant at sussing out what customers want (and will pay for). So what if Lewis doesn’t ooze charisma? His investors like him just the way he is. —J.S.

No. 17 Sumner Redstone
Viacom (VIA)

Let’s hear it for Sumner Redstone. He may wear cheap-looking sports coats, have trouble sharing credit for his company’s triumphs, and refuse to name a successor. But the 80-year-old CEO doesn’t have to defer to anybody. He owns $8 billion of Viacom stock (market cap: $77 billion), including enough super-voting shares to control its board of directors, not to mention assets like MTV, CBS, Paramount Pictures, and Simon & Schuster. And Redstone — who recently married a woman half his age — is showing no signs of slowing down as a dealmaker. He’s snapped up assets from debt-laden competitors like AOL (Comedy Central). Now he’s eyeing Vivendi’s Sci Fi Channel. But the most impressive thing Sumner has done this year is negotiate a deal to keep Viacom’s respected COO Mel Karmazin — a guy with whom he has a famously tense relationship — from jumping ship (see No. 18). Investors swooned. Mel even went to Sumner’s wedding. Now here’s the question: Can they keep dodging divorce? —Devin Leonard

No. 18 Ivan Seidenberg
Verizon (VZ)

If anyone on this list could go unnoticed in a roomful of big-name executives, it would be Ivan Seidenberg. What he lacks in star power, though, he makes up in market might. Seidenberg, 56, runs the nation’s tenth-largest company, providing mission-critical phone lines to many parts of the U.S. government, the city of New York, and the New York Stock Exchange — not to mention dial-tone and cellular service to scores of VIPs all over the country. His influence extends far beyond telecom. When a feud between Viacom’s Sumner Redstone (No. 17) and Mel Karmazin became public last summer, sources say it was Seidenberg, a longtime Viacom board member, who persuaded the executives to resolve their issues in private. That kind of power certainly should make a crowded room take notice. —Stephanie N. Mehta

No. 19 Carly Fiorina
Hewlett Packard (HPQ)

The wire-service photo from the World Economic Forum’s recent Global Reconciliation Summit beside the Dead Sea in Jordan was a tutorial in power: Carly Fiorina leaning in close behind Colin Powell, whispering in the Secretary of State’s ear. It’s a scene she repeats over and over: Carly schmoozing with President Bush on economic issues; Carly giving Tom Ridge an earful on how to integrate large organizations; Carly making playful small talk with Nelson Mandela. This is a global stateswoman masquerading as a Fortune 500 business executive, so well known that just her first name suffices. (She was born, by the way, as Carleton, a male name passed down through generations of her father’s family.)

Fiorina, 48, does much more than globetrot. This former English teacher, the first nonengineer to run Hewlett-Packard, arguably started the consolidation of the computer industry with the 2002 acquisition of Compaq for $19 billion. Critics ridiculed her for the move — one bad PC business merged with another bad PC business does not a good PC company make, they said — but she persevered in the face of a grueling shareholder battle. And whaddya know, with HP’s profitability improving and its stock price finally inching over its pre-deal level, Fiorina is beginning to taste vindication. With tech-industry consolidation all the rage (think Oracle/PeopleSoft, Yahoo/Overture), she’s even become something of a visionary. Says John Chambers (No. 21), CEO of Cisco Systems, where Fiorina has a board seat: “She’s potentially one of the top CEOs of all America.” —Adam Lashinsky

No. 20 Stan O’Neal
Merrill Lynch

By turning once-softhearted “Mother Merrill” into a lean, mean high-margin machine — and by navigating regulatory probes of its research unit — O’Neal restored luster to one of the great names on Wall Street. His traders dominate the market as middlemen. His investment bankers are once again landing big-dollar deals. His 14,000-stockbroker army is capturing wealthy individual investors. Insiders say O’Neal, 51, is too tough. He’s certainly determined. He won a brutal succession battle for CEO, has maintained close ties to key board members, and has assembled a kitchen cabinet — called the “junta” by some — that follows his commands with precision. Love him or hate him, the results speak for themselves: Merrill earned $2.5 billion in 2002 and stands to do even better this year. —D.R.

No. 21 John Chambers
Cisco (CSCO)

Listening to a John Chambers speech today is an astonishing experience. The world couldn’t be more different from what it was three years ago, when Cisco briefly had the biggest market capitalization of any corporation on the planet ($531 billion). But in fundamental ways, the CEO’s speeches haven’t changed at all. They’re still about the power of the Internet to revolutionize the business world, and implicitly about how Cisco makes out like a bandit selling the gear that enables all that. Chambers still sprinkles his remarks with references to top bureaucrats and heads of state who have signed on to his vision. And he still encourages the rest of the business world to look to Cisco as the best example of what will be possible. It’s hokey, self-serving, and sanctimonious at the same time. It also happens to be right. Internet traffic continues to double every year, and Cisco dominates the market for corporate networking gear in ways that only two other corporations, IBM in the 1970s and Microsoft, have been able to muster. Its $127 billion market cap remains the 14th biggest in the U.S. While Chambers is indisputably less powerful than he once was — his shtick has certainly worn thin with investors who bet on Cisco in 2000, before the stock fell by 90% — he’s still here. Get used to it. —F.V.

No. 22 Henry Paulson
Goldman Sachs (GS)

Of all the CEOs on Wall Street, only Paulson has been secure enough to speak out against corporate malfeasance. At a June 2002 speech to the National Press Club on the firestorm of criticism leveled against American business, Paulson famously said, “To be blunt, much of it is deserved.” Maybe it follows, then, that of the big investment banks, Goldman is the least tainted by scandal. Paulson, 57, a tall and steely Midwestern type, outmuscled then-CEO (and now U.S. Senator from New Jersey) Jon Corzine to grab the top spot shortly before the blue-chip bank went public four years ago. Since then GS stock has beaten the market, as well as that of arch-rivals Merrill Lynch and Morgan Stanley (MS). During a visit to New York last year, China’s President Hu Jintao asked Paulson to host him at the New York Stock Exchange and accompany him on his visit to ground zero with Mayor Bloomberg, making him the only Wall Street CEO so honored. Though Goldman is smallish relative to competitors like Citigroup and CSFB, the firm’s influence in sectors like mergers and acquisitions and underwriting far outweighs its size. —A.S.

No. 23 Brian Roberts
Comcast (CMCSA)

His cable company pumps music videos to more than 21 million homes and delivers fast Internet service to four million users, making Roberts, 44, a very important man to the MTV set. (Eminem even raps about watching Comcast in “Criminal.”) But what makes this CEO really powerful is the growing clout he wields over grownups such as AOL’s Dick Parsons (No. 24), Disney’s (DIS) Michael Eisner, and Viacom’s Mel Karmazin: Roberts is seeking volume discounts on the programming he buys from those media moguls. Given Comcast’s incredible market strength, many industry insiders are betting Roberts gets his way. A former squash All-American, Roberts is relentless when he puts his mind to something. He never flagged in his bid to acquire AT&T’s (T) cable assets, for example, a $51 billion transaction that turned No. 3 Comcast into the largest cable operator in the country. And because his family has 33% voting control, Roberts has something many of his rivals don’t: job security. –S.N.M.

No. 24 Dick Parsons
AOL Time Warner (TWX) (AOL)

Not only does Parsons sit atop the world’s largest media company — an empire that includes movies, music, television, cable and online services, and Fortune publisher Time Inc. — it looks as if he may have the power to turn around the wounded giant. In his 14 months as CEO, he’s managed to stabilize the $42 billion company, in part by telling division heads to focus on running their businesses instead of fretting about merger synergies. And Parsons, 55, has quietly exercised his authority in the boardroom, securing the chairmanship following last May’s resignation of Steve Case. Despite his strong start, this consummate diplomat — unlike his higher-ranked fellow moguls — is still grappling with some tough problems, including an ongoing SEC investigation, sluggish performance at AOL, and a delayed IPO of Time Warner Cable (TWC). —S.N.M.

No. 25 Rick Wagoner
General Motors (GM)

Affable and engaging in private, Wagoner, 50, is Detroit’s new tough guy. His message to competitors whose customers are fleeing to foreign makes: “Stop whining.” If $4,000 worth of incentives on GM cars pushes less-efficient automakers to the brink, Wagoner doesn’t care: He’s going to do what makes sense for his company. Despite GM’s size, Wagoner is hemmed in by union contracts, government regulations, and giant health-care and retiree costs. And he hasn’t yet succeeded in getting GM’s stock price to stay up: Even though it ranks second in revenues, GM is just No. 94 in market capitalization. Still, Wagoner has more clout than any American in the industry. —Alex Taylor III

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Much of their work is done behind the scenes. But this plugged-in foursome are Grade A movers and shakers: They have the power to make other people powerful.

Herb Allen The guest list at the billionaire investment banker’s annual Sun Valley, Idaho, confab reads like a Who’s Who of our most powerful: No. 1 Warren Buffett, No. 2 Bill Gates, and No. 3 Lee Scott all attended this year.

Joe Bachelder This 70-year-old lawyer makes the rich richer. He has negotiated more megabuck CEO contracts (for folks like IBM’s Lou Gerstner and Honeywell’s (HON) Larry Bossidy) than anyone else.

Tom Neff CEO headhunter and Spencer Stuart’s U.S. chairman, Neff, 65, edges out longtime rival Gerry Roche thanks to recent successes: placing Jim Kilts at Gillette and Hugh Grant at Monsanto (MON).

Franklin Thomas If real clout lies in the boardroom, then 69-year-old nonprofit consultant Thomas has it: He’s lead director of powerhouse Citigroup, plus a director at Lucent Technologies, PepsiCo, Cummins (CMI), and Alcoa (AA).

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The Disrupters
“In disruptive innovations … [there are] strong first-mover advantages,” wrote Harvard professor Clayton Christensen in his 1997 bestseller, The Innovator’s Dilemma. These seven innovators built their power on exactly that principle: developing a novel concept that shook an industry.

Jeff Bezos You don’t go from obscurity to Time’s person of the year in four years — Jeff Bezos made it in 1999 — unless you’re causing quite a stir. Nearly a decade since he started Internet retailing pioneer (AMZN), Bezos, 39, remains one of the most controversial figures in business. Large chunks of the investment community still think his is just an online-catalog company. But Amazon’s results — the stock has more than doubled over the past 12 months — increasingly demonstrate that Bezos has found a more powerful formula. Amazon makes money selling its own merchandise, and it makes money selling competitors’ wares too. –Fred Vogelstein

Sergey Brin and Larry Page The tech world hardly noticed when this duo quit Stanford five years ago to start an Internet search engine. Now Brin, 29 (near right), and Page, 30, sit atop Google (GOOG), a company that processes 250 million searches a day, or 2,900 searches a second, in 88 languages in 32 countries. By deciding what information gets featured where, they may be the new kings of content. And their coming IPO will probably make them very rich. —F.V.

David Neeleman He started fare wars in New York from the moment he launched JetBlue (JBLU) at JFK in February 2000. Neeleman’s idea: Offer passengers convenient long-haul routes that bypass the major airlines’ hub-and-spoke systems while undercutting on price by using nonunion employees (who sometimes find their hyperkinetic 43-year-old CEO pitching in to help). In a year when the airline industry lost $11 billion, JetBlue made $55 million. —John Helyar

Fred Smith He founded FedEx (FDX) in 1971 with a revolutionary concept: Deliver packages reliably overnight. In doing so, he created an industry. Smith, 59 — the only boss the $22.5 billion company has ever had — has shrewdly diversified, expanding beyond his flyboy roots into ground-package delivery beginning in 1998. He knows his way around D.C., where he speaks out on tax and trade policy. And his mantra — information about the shipment is as important as the shipment itself — has been adopted by thousands of businesses. —A.T. III

Linus Torvalds Twelve years ago he wrote the Linux computer operating system so that he could use his home PC to write programs that would also run on his university’s Sun workstations. Today Linux allows CIOs to replace multimillion-dollar proprietary systems with cheap commodity servers. Torvalds hasn’t gotten rich from it because the guts of the code are free. But the 33-year-old Finn still oversees key elements of its development — which makes him a leader of one of the greatest power shifts in the computer industry since the birth of the PC. —F.V.

Meg Whitman The lone adult supervisor when she took the helm of eBay (EBAY) in 1998, Whitman, 47, now oversees a multinational corporation that’s causing a ruckus far beyond the world of Beanie Babies collectors. She is seriously shaking things up in markets as diverse as electronic payment processing and auto sales. And she has changed the way office workers waste time — perhaps forever. —A.L.

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Some people have an uncanny ability to influence what others think (and, by extension, do). Here are five.

Jim Collins The writer of such bestsellers as Built to Last and Good to Great, Collins, 45, is the most influential management thinker alive.

Steve Jobs Every move of Apple’s (AAPL) 48-year-old founder and creative force is aped, from the eclectic designs and materials he incorporates into his computers to the cutting-edge animation from his Pixar Studios.

Howard Schultz Starbucks’ (SBUX) 50-year-old chief global strategist has the power to make us all think it is perfectly normal to plunk down $3 for a cup of coffee. (And last week 20 million of us did.)

Paul Steiger As editor of the Wall Street Journal — the paper that posts the agenda for American business — Steiger, 60, can move markets and strike fear into the hearts of CEOs everywhere.

Oprah Winfrey The merest nod from the daytime talk queen, 49, can launch a national trend — or a book-buying binge.

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People who (we fervently hope) know what they’re doing
Put away your leadership gurus and your office-politics visionaries. Sometimes you just want to know who really has his finger on the button. Here are half-a-dozen little-known players who speak softly — but carry some awfully big sticks.

David Blitzer It’s up to Blitzer, 54, chairman of the Standard & Poor’s Index Committee, to decide which companies go on and off S&P’s benchmark 500-stock index. The committee adds or drops about 25 a year. For the lucky ones, the ramifications are massive — such as a 5% to 8% stock price bump within the first week, mostly due to buying by huge index funds.

William Chandler III Chandler, 52, is the law of the land in business — and that land is Delaware. That’s where more than half of the Fortune 500 are incorporated. As a judge at the state Court of Chancery, he has issued key rulings that permitted the merger of Hewlett-Packard and Compaq and a shareholder lawsuit against Disney for Mike Ovitz’s huge severance package.

John Crain The backbone of the Internet is run by 13 “root servers” around the world. At the Internet Corporation for Assigned Names and Numbers (ICANN), John Crain, 37, heads the tech team that keeps them up and running. “The entire Internet eventually comes through” these machines, he says. Where in Los Angeles is his root server located? Luckily Crain’s not telling.

Gamal Helal Remember that photo of Clinton and Arafat at Camp David? Or the one of Cheney and Amir Hamad bin Khalifa Al-Thani in the Wajbah Palace in Qatar? That’s Helal, 49, in the middle of both. The chief White House translator for 22 countries across the Middle East and Africa, he bears the burden of making sure George W.’s “strategery” comes across clearly in Arabic.

Peter Niculescu You probably owe him your house. Niculescu, 43, who’s from New Zealand and used to work at Goldman Sachs, manages Fannie Mae’s $812 billion mortgage portfolio business. It brings in two-thirds of the revenues for a company that guarantees 25% of the mortgage debt outstanding in the U.S. Oh. Well. Thanks, Peter.

Mike Pereira The NFL’s 53-year-old officiating director does his best to teach 119 part-time employees to make split-second decisions that affect hundreds of players and coaches (and millions of fans) every football Sunday. Which doesn’t make it easier when a zebra has to stick his head into that black box to replay and review a call — in the spotlight, alone.

–Grainger David and Jeffrey Birnbaum

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Golden Geese
You don’t have to run a company to be essential to its success. These folks are worth a boatload of MBAs.

Roger Ailes He made Richard Nixon telegenic (as much as anyone could). He made CNBC the official channel of the stock market boom. Then Ailes, 63, built Fox News Channel into an inescapable political and societal force.

Chris Albrecht Eight years, 82 Sex and the City and 52 Sopranos episodes after Albrecht, 50, was put in charge of programming at HBO, the cable channel is TV’s gold standard.

Tom Ford No designer on earth has more influence than Gucci Group’s preposterously talented 41-year-old creative director.

 Spongebob Squarepants It’s not just that this sweet-tempered cartoon sponge’s show airs 26 times a week on Viacom’s Nickelodeon. It’s that at this very moment your kid has a SpongeBob Band-Aid on his elbow and is scarfing SpongeBob-shaped macaroni and cheese. And wait — is that a SpongeBob tie you’re wearing?

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Foreign powers
Our list of the 12 most powerful business leaders outside the U.S. is made up of seven Europeans, four Asians, and a Middle Easterner. What’s missing? There’s no one from Africa or Latin America.

1. John Browne CEO Browne, 55, transformed Britain’s BP (BP) from an also-ran into a global oil power (and the world’s third-largest oil company) with the purchase of Amoco in 1998 and Arco in 2000. In Russia, he has formed the largest joint venture of any Western investor. He’s a favorite with women’s groups and the green lobby.

2. Nobuyuki Idei The 66-year-old Sony (SNE) lifer, a cosmopolitan sort who serves on the boards of General Motors and Nestle, is the architect of the $61 billion Japanese company’s global electronics dominance. Idei’s next task: Mix the company’s strengths in innovation and technology with movies, games, and multimedia.

3. Shoichiro Toyoda Fujio Cho runs day-to-day operations. But founding-family patriarch and honorary chairman Toyoda, 78, is the ultimate authority at Japan’s Toyota Motor (TM), which earned more money last year ($7.8 billion) than any other automaker.

4. Jurgen Schrempp It was Schrempp, 58, who rammed the 1999 DaimlerChrysler merger through. And though it has been a rocky ride, the German remains firmly in control after replacing most of Chrysler’s senior management.

5. Josef Ackermann The Swiss-born CEO of Germany’s largest bank, Ackermann, 55, has cut costs, raised profits, and streamlined operations — making Deutsche Bank (DB) one of Europe’s best hopes to rival the power of the U.S. investment banks.

6. Li Ka-Shing Want to ship goods through the Panama Canal? Li leases ports at both ends. Want to get stuff out of China? Likely it will go in one of his containers. Chairman of Hutchison Whampoa, Hong Kong’s biggest conglomerate, Li, 74, has become Asia’s richest man.

7. Silvio Berlusconi As founder and deputy chairman of Mediaset, Berlusconi owns three of the country’s TV networks. As Prime Minister of Italy, he controls all three of the state-owned stations. Unsurprisingly, the 66-year-old billionaire gets the most timid domestic media coverage of any Western leader.

8. Claude Bébéar “The Crocodile” retired in 2000 as CEO of AXA, the global insurer he built from a clutch of obscure financial companies. But as chairman, Bébéar, 67, remains the most powerful figure in French business. Last year he engineered the removal of Jean-Marie Messier as CEO of Vivendi.

9. Jorma Ollila Since becoming CEO in 1992, Ollila has turned Nokia into Europe’s most innovative and best-run telecom outfit. Though many markets are close to saturation, the Finnish company’s share of the mobile-phone business is a commanding 38%.

10. Carlos Ghosn This Brazilian-born Frenchman of Lebanese descent has turned Japan Inc. inside out. Ghosn, 49, took over as CEO at troubled Nissan in 1999. Last year Nissan recorded the industry’s highest profit margins, making $4.1 billion on revenues of $56 billion.

11. Abdallah Jum’ah The global economy runs on oil, and since 1995, Jum’ah, 63, has been the man with his hand on the tap. As the CEO of Saudi Aramco, which is owned by the Saudi Arabian government, he controls a quarter of the planet’s estimated reserves.

12. Yun Jong Yong Yun says his mission as CEO of Samsung Electronics is to remind managers “we could go bankrupt any day.” Since 1997 he has transformed the Korean giant from a corpulent also-ran to an agile competitor against the likes of Nokia and Sony.

Clay Chandler, Janet Guyon, Cait Murphy, Richard Tomlinson

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While they don’t have monopoly power, these guys are the definition of dominance: They’re the most powerful players in their industries.

Irwin Jacobs By pioneering the commercialization of (and snapping up a load of patents for) the digital wireless standard CDMA, Qualcomm (QCOM) CEO Jacobs, 69, has conquered the North American market for cellphone chipsets. Now he’s focusing on Asia and South America.

Lowry Mays Over the past seven years Clear Channel founder and CEO Mays, 68, has amassed a $26 billion empire that includes 1,200-plus radio stations, reaching more than 100 million listeners a week. His massive consolidation, complain critics, has made the airwaves all around the country sound the same.

Bill McGuire The CEO of UnitedHealth Group (UNH), 55, transformed a $600-million-a-year regional HMO into the nation’s largest health-services company, with $25 billion a year in sales. UnitedHealth now counts one in six Americans — 50 million — as customers.

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Junior Varsity
They may not make it into the starting lineup this year. But give these promising second-stringers time.

Steve Burker Burke, 44, is the second in command at fast-rising Comcast. But he won’t always play second fiddle. His name routinely gets thrown around for possible CEO jobs in cable and beyond. (Disney, perhaps?)

Sue Decker and Dan Rosensweig Insiders predict that either CFO Decker, 40, or COO Rosensweig, 42, will succeed Terry Semel as CEO of Yahoo (YHOO). We’ll see. For now, they’re the best young tag team in tech.

Abby Johnson She’s the No. 3 at the No. 1 mutual fund company, Fidelity Investments. Oh, yeah — she and her family own nearly half the place. You’d better believe Johnson, 41, won’t be No. 3 forever.

Jeff Zucker This 38-year-old wunderkind, who became the Today show’s executive producer at 26 and now runs both NBC Studios and NBC Enterprises, is the most promising young media exec around.


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