Morten Bennedsen, University of Copenhagen and INSEAD. "Value-Based Leadership"
Department seminar. Morten Bennedsen is the Niels Bohr Professor at the University of Copenhagen and the André and Rosalie Hoffmann Chaired Professor of Family Enterprise at INSEAD. He will present the paper: Value-Based Leadership.
The strength of personal values and how these penetrate firm organization is measured through a survey of 1500 Danish CEOs. We construct a measure of value-based leadership and investigate the impact on firm outcomes and firm policies. First, value-based leadership is more common in family firms and with female leadership, but not correlated to leaders’ IQ nor to management practices. Second, value-based leadership is positively correlated to firm performance. Causal evidence is provided through the analysis of CEO changes and CEO hospitalizations. Third, value-based leaders build more resilient organizations in a pandemic crisis and generate less conflicts, lower employee turnover and a flatter organizational structure in normal times. Taken together, leaders’ personal values and how they spread through organizations are important factors in explaining the value they bring to their firms.