Guido Friebel (Goethe U); Morten Bennedsen (Copenhagen/INSEAD); Esther Bianco; Maria Schlier (Goethe U)
Abstract
We measure value-based leadership (VBL) -- the strength of personal values and to what extent they penetrate firms' organization -- in a survey of 1,500 Danish CEOs. First, VBL is more common in family firms and women CEOs. It is not correlated with the CEO's IQ or management practices. Second, VBL correlates with firm performance; CEO turnover and hospitalizations establish the causality of this link. Third, firm policies are different: (i) during the pandemic, VBL firms have lower employee turnover; (ii) in normal times, they have flatter organizational structures and less conflicts. Factor analysis confirms robustness of the findings; other factors derived from a deep survey on CEO characteristics and opinions do very little to explain firm outcomes. We conclude that VBL explains part of the value added of CEOs.