Do CEO Personality Traits Matter?

One could argue that the person who has the most impact on a company’s profitability is the CEO. Given the crazy compensation that some of them get, boards of directors certainly think this is the case. A lot goes into selecting CEOs and you can’t exactly conduct a validation study for one at your company (as if the board would allow science into the conversation anyway).

As it turns out, accountants are just as interested in this as HR professionals. This article summarizes this study of one particular CEO trait—narcissism. As you would suspect, their findings show that narcissistic CEOs are good for themselves (negotiate higher salaries), but not so much for long term outcomes for their companies.

Those of you who are research minded are probably thinking, “That all sounds great, but how did they get enough CEO narcissism data to do the research?” The answer is handwriting analysis. Yes, you read that correctly.

Physical attributions of personality have a long and poor track record in employee selection. From phrenology to handwriting analysis, these types of inferences have not been shown to be valid or reliable. This study uses the size of a signature, as found in documents filed with the Securities and Exchange Commission, as an indicator of narcissism. And, while probably not as accurate as other measures, it turns out that signature size is a pretty reasonable proxy of the trait. You can also see how it would be less easily faked than a personality inventory.

The bigger question is how HR can have more influence in the hiring of high stakes positions. While asking for executive applicants’ signatures may not be the best way to go, informing hiring committees about predictors of performance may at least get them thinking in the right direction rather than being swayed by red herrings.

What do you do to influence hiring decisions for executives?

 

 

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