Measuring CEO personality: Developing, validating, and testing a linguistic tool

Research Summary We introduce to the upper echelons literature a novel, linguistic measure of CEOs' Big Five personality traits that we specifically developed and validated using a sample of CEOs. We then provide a predictive test of the measure by applying it to a sample of more than 3,000 CEO...

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Bibliographic Details
Published in:Strategic management journal 2019-08, Vol.40 (8), p.1316-1330
Main Authors: Harrison, Joseph S., Thurgood, Gary R., Boivie, Steven, Pfarrer, Michael D.
Format: Article
Language:English
Subjects:
Agreeableness
Big Five traits
CEO personality
Change agents
Chief executives
Companies
Conscientiousness
Extraversion
firm performance
Five factor model
Neuroticism
Openness
open‐language machine learning
Organizational performance
Personality
Personality traits
RESEARCH ARTICLE
strategic change
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Summary:Research Summary We introduce to the upper echelons literature a novel, linguistic measure of CEOs' Big Five personality traits that we specifically developed and validated using a sample of CEOs. We then provide a predictive test of the measure by applying it to a sample of more than 3,000 CEOs of S&P 1500 firms to explore the direct and interactive effects of CEOs' Big Five personality traits and firm performance on strategic change. Our validated, unobtrusive measure of CEOs' Big Five traits provides a strong foundation for future theory development on the firm‐level effects of CEOs' personality traits. Our specific findings also extend our understanding of how CEO personality influences firm‐level change and how both person and situation‐based factors interact to jointly influence firm strategy. Managerial Summary This paper introduces a language‐based tool we developed to measure the Big Five personality traits (i.e., openness, conscientiousness, extraversion, agreeableness, and neuroticism) of more than 3,000 CEOs of S&P 1500 firms. After describing our process to develop and validate the tool, we test it by examining how CEOs' Big Five traits influence strategic change, both in isolation and in combination with recent firm performance. Our results suggest that CEOs' personality traits have a meaningful impact on strategic change, but that the nature of these effects differs based on their firms' recent performance. Our tool also provides a strong basis for scholars seeking to measure the personality traits of large samples of public‐company executives.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.3023