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LOGAN – Groundbreaking research involving Dr. Gary Thurgood of Utah State University’s Huntsman School of Business, and colleagues from Texas A&M, TCU and Georgia, studied how the market reacts to CEOs’ personalities.

He said what is very important in assessing a CEO is that person’s predictability and stability.

”If a market is trying to predict how a company, and how an individual that leads that company, are going to act in the future, a big part of that is predictability,” Dr. Thurgood explained. “Now, whether that’s predictability in terms of our knowing they are going to be erratic, at least if we know they are going to be consistently erratic, that’s at least more predictable.

“Or, if we know they’re going to be predictably stable or conservative, then at least that’s predictable.”

What is his biggest takeaway from five years of research?

”I guess we’re not super surprised that someone who’s more conscientious is going to have a firm that tends to be less risky; somebody who is conscientious is more dependable and so forth,” he added. “Somebody who is more neurotic, (who) is just a little more emotionally unstable, maybe they have high anxieties, they tend to blow up at people, or whatever, those people are more risky.”

Dr. Thurgood said the team developed a machine learning algorithm by studying and comparing CEO personality traits based on video clips and written transcripts of quarterly earnings meetings.

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