C-Suite Symphony: CEOs and firm performance

The Management Lab

CEOs are central figures in organizations, standing at the helm of large corporations and wielding the power to create substantial wealth. Their influence is imprinted not just on their employees and shareholders, but also on society at large. They create jobs, foster innovation, and drive the engine of our economy. On the other hand, some CEOs prioritize short-term financial gains over long-term corporate health, employee welfare, and societal benefits. CEOs’ power can lead to unchecked decision-making, risking not only company assets but also affecting the lives of employees and stakeholders. In this episode, we explore the degree to which CEOs actually influence the performance of the organizations that they lead. We draw on recent research to answer some of the most pressing questions in this area, including: What CEO leadership styles most strongly contribute to firm performance? Does delegating tasks to subordinates contribute to firm performance? In which countries are senior leaders most likely to delegate tasks? Does a transformational leadership style improve firm performance? How is prior CEO experience associated with firm performance? What type of CEO is most likely to take time off when popular sporting events are being broadcast? Research discussed in this episode include the following: Ashford, S. J., Wellman, N., Sully de Luque, M., De Stobbeleir, K. E., & Wollan, M. (2018). Two roads to effectiveness: CEO feedback seeking, vision articulation, and firm performance. Journal of Organizational Behavior, 39(1), 82–95. Hamori, M., & Koyuncu, B. (2015). Experience matters? The impact of prior CEO experience on firm performance. Human Resource Management, 54(1), 23–44. Jensen, M., Potočnik, K., & Chaudhry, S. (2020). A mixed-methods study of CEO transformational leadership and firm performance. European Management Journal, 38(6), 836–845. Mackey, A. (2008). The effect of CEOs on firm performance. Strategic Management Journal, 29(12), 1357–1367. Sadun, R. (2023). CEOs and Firm Performance. e, 1, Cambridge, MA: National Bureau of Economic Research.