Originally found at Phys.org
Compassionate leadership has tangible benefits: CEOs' expressions of empathy correlate with positive stock performance, a study led by the University of Zurich shows. The researchers analyzed data from conference calls between CEOs and financial analysts during the COVID-19 pandemic. The paper is published in the journal Academy of Management Discoveries.
The COVID-19 pandemic prompted an unprecedented financial crisis. Between 24 February 2020, and 20 March 2020, the value of U.S. companies on the stock market decreased significantly, surpassing the decline during the 2008–2009 financial crisis.
At the onset of the pandemic, several CEOs made statements in conference calls with financial analysts that were not directly related to the business at hand, expressing their concerns for people. These statements are the focus of a new study by researchers from the University of Zurich, the London School of Economics and Political Science and Cambridge Judge Business School.
The researchers analyzed 510 CEO conference calls by 448 large U.S. companies during the COVID-19 pandemic. They discovered that, despite the human-centric context of the pandemic, just over a half (51.8%) of the CEOs made at least one statement that expressed care for people during the calls. Furthermore, most of these statements were superficial and lacked concrete actions. Despite this, companies whose CEOs acknowledged the human impact of the pandemic had better stock prices than those whose CEOs did not.
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