Narcissism of US Business Leaders Assessed by MGSM Dean: MBA News

By QS Contributor Updated Jun 15, 2014

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Macquarie Graduate School of Management study to look into effects on company performance

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Can the narcissism of business leaders have an impact on company performance? That's the question that Alex Frino, dean of Macquarie Graduate School of Management (MGSM) in Sydney, seeks to explore in his ongoing research.

Frino's latest findings at MGSM have enabled him to produce a list of the ten least narcissistic business leaders from an analysis of CEOs at the US' 100 largest companies.

Among the ten are three women, including PepsiCo CEO, Indra Nooyi. The three least narcissistic business leaders were found to be Pat Gelsinger (CEO of computer software firm, VMware), Gregg Steinhafel (CEO of retail chain, Target) and Omar Ishrak (CEO of medical equipment company, Medtronic.) The MGSM dean has tactfully chosen not to reveal who features at the bottom of his list.

Frino's methodology revolves around applying natural language technology to a company's quarterly earnings call transcripts to form a ratio between how often the CEO uses the pronouns 'I', 'me' and 'mine' compared to the more collective, 'we', 'our' and 'ours'.

The narcissism ranking stems from this resultant metric. Aware that he could be rewarding business leaders simply for well-rehearsed speeches, Frino disregarded prepared scripts featuring at the start of earnings calls, focusing instead on the ensuing quick-fire Q&A sessions with analysts to gain a truer indication of a CEO's personality.

Macquarie Graduate School of Management study to look into effects on company performance

The levels of narcissism among US business leaders isn't a curiosity project on the part of Macquarie Graduate School of Management's dean. Frino wants to explore its correlation with company performance.

This is something he has already done for large companies in Australia, and with interesting results. For the period September 2011 to March 2013, Frino found that the group of business leaders found to be the least narcissistic had annualized stock returns that were almost double those of the worst offenders of the 'me', 'mine' and 'I' stakes.

This isn't to say that the narcissist has no place in the world of business. Speaking in the Washington Post, the MGSM dean cites a 2000 Harvard Business Review article on same topic where Michael Maccoby asserts that CEO narcissists aren't always a bad thing.

"When you’ve got a lot of upside risk in the market, a narcissist can be very inspirational. They are good risk takers. But if you’ve got tough tradition conditions, you need someone who’s more cautious," said Frino.

At Macquarie Graduate School of Management, Frino specializes in teaching corporate finance and derivatives. He is also lead author of the finance textbook, An Introduction to Corporate Finance, now in its fourth edition.

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