The CEO Brand and Its Impact on Business
Over Eighty Percent of Fastest Growing Companies Since 2015 Are Led by a Vocal CEO
July 10, 2020DownloadsDownload Report
New research by FTI Consulting sheds light on the role of the CEO on a company’s valuation. While this is one factor among many, the research indicates that companies whose CEOs demonstrate strong leadership, and were publicly vocal, better withstood the negative impacts of the initial stages of the COVID-19 pandemic. This stronger investor confidence translates into as much as US$260 billion in additional shareholder value.
Furthermore, CEOs who embrace the growing importance of ESG and ‘stakeholder capitalism’ performed better still in this period. ‘Stakeholder CEOs’ – those who spoke about issues not directly related to their business’s bottom line – outperformed their industry peers by an average of 3.75 percent. Beyond the COVID-19 crisis, the research reveals the longer-term impact of a vocal CEO with outspoken leaders overseeing the vast majority (81 percent) of the fastest growing companies in the world.
To come to these conclusions, FTI Consulting analysed the 100 fastest growing companies by share price, listed in the United States, United Kingdom and Europe for their leadership’s communication styles from February 2015 to February 2020. To be able to compare against data measured against the backdrop of one of the most protracted bull markets in history, FTI Consulting also looked at a turbulent bear market.
The impact of this leadership style on share prices was measured during the global COVID-19 pandemic, from one week before the WHO declared a pandemic (4 March 2020) to 11 May 2020.