Psychopathic traits of corporate leadership as predictors of future stock returns
Journal article
Authors | Wisniewski, Tomasz Piotr, Yekini, Liafisu Sina and Omar, Ayman |
---|---|
Abstract | This paper examines whether it is possible to forecast one-year-ahead returns of individual companies based on the observed ‘psychopathic’ characteristics of their top management team. We find that language characteristic of psychopaths present in annual report narratives, questionable integrity, excessive risk-taking and failure to contribute to charitable undertakings tend to reduce future shareholder wealth. These findings imply that firms could benefit from incorporating psychological evaluation in their recruitment processes, especially when seeking to fill senior management posts. While the return predictability described in this paper supports the upper echelons perspective, it simultaneously challenges the notion of informationally efficient stock prices. |
Keywords | corporate psychopaths; stock market returns; shareholders wealth; behavioural finance |
Year | 2019 |
Journal | European Financial Management |
SSRN Electronic Journal | |
Publisher | Wiley |
ISSN | 13547798 |
1468036X | |
Digital Object Identifier (DOI) | https://doi.org/10.2139/ssrn.2984999 |
Web address (URL) | http://hdl.handle.net/10545/624224 |
hdl:10545/624224 | |
Publication dates | 07 Oct 2019 |
Publication process dates | |
Deposited | 23 Oct 2019, 08:06 |
Accepted | 29 Oct 2018 |
Contributors | Coventry University |
File | File Access Level Open |
File |
https://repository.derby.ac.uk/item/92ww9/psychopathic-traits-of-corporate-leadership-as-predictors-of-future-stock-returns
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