CEOs who are servant leaders: The path to better firm performance?

2013. Academy of Management Perspectives. Vol. 27, No. 1

Edgar Kausel E, Satoris Culbertson

Abstract:

The popular press has portrayed CEOs as being so greedy that the thought of a benevolent CEO seems too good to be true.  However, indeed, there are leaders with a strong moral compass, who focus on the needs of their followers rather than their own self-interest. But does being such a leader actually pay off? The purpose of the paper was to examine the relationships between CEO servant leadership,  narcissism, founder status, organizational identification, and subsequent firm performance.

Researchers Peterson and his colleagues used a sample of 126 CEOs from the software and hardware technology industries. First, as expected, two antecedents of CEO, servant leadership and identification with the firm, were having a low level of narcissism and being the company founder. In addition, CEOs who were higher in servant leadership appeared to have a more positive impact on the firm’s financial outcomes, with servant leadership predicting firm performance. In sum, having a CEO that focuses on both employees and ethical actions can lead to financial payoffs for organizations. Furthermore, this leadership style has antecedents that are both stable (narcissism and founder status) and modifiable (identification with the company).

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