Does the personality of a CEO impact on company performance?

This old discussion piece has naturally raised its head with the debate over Boris Johnson and how his behaviours – rightly or wrongly – will impact on the Government. However, is it true also for companies? Do people focus more on the personality of a leader than on what a company delivers?

Each company only has one “peerless” role and that will be the lead player. Their behaviours will naturally set the tone for the company both internally and externally. This may sound like an extra burden to place on the lead but has long been the case in business, politics and in sport. The British have long placed a special emphasis on their leader to a far greater extent than many other cultures.

One of the debates during the last decade has been that many CEOs became less accessible, less visible and for those companies, often the overall performance of the company declined. For those companies who possessed visible leadership, often performance excelled.

This then raises a number of questions and thoughts:

· Is visible, engaging leadership a key part of business growth if it does impact on performance?

· Is it a myth and unimportant?

· Do people have a tendency to play the person rather than issues or service performance?

Some thoughts for your reflection:

· It is estimated that 45% of a company’s performance lies with the CEO and how they behave.

· Just over 40% of newly appointed CEOs live up to expectation in their first 18 months in the role

· Experienced CEOs estimate it takes two years to learn the demands of the role.

· The lifespan of CEOs has increased over the last decade as many investors believe that an experienced CEO will be able to perform more effectively than a new CEO. It is no coincidence that the average age of a CEO and a board director has increased by over a decade since 2009.

· Equally, many ineffective CEOs have lasted in roles longer as of a concern by investors to appoint a new CEO.

The above does prompt the question as to whether the experience is proven to be better than a fresh perspective in leadership?

The truth is that a CEO holds more influence in their hands than many realise. Now add into the equation:

· Over 40% of employees have been looking for a new role

· The majority of millennials do not believe that their leadership teams run business on ethical grounds

· 63% of employees do not trust their own leaders.

The pressure on CEOs over the next few years is going to be high and there will be little hiding place. Evidence does suggest that visibility, engagement, active communication and behaviours will all be where CEOs do need to perform strongly and the demands are set to increase.

Will this lead to more change at the board level? Time will tell.