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Speaking out is paying off for CEOs, according to a new study conducted by FTI Consulting.
Out of the 100 top-performing companies analyzed in “The CEO Brand and Its Impact on Business,” 81 percent are led by CEOs who have a distinct brand and “consistently communicate.” Twelve of the top 15 firms are headed by CEOs who place a premium on communications.
Those CEOs topped their less communicative peers by an average of two percent, resulting in what FTI says is $260B in added shareholder value.
In addition to resulting in increased overall performance, an emphasis on CEO communications also made companies more likely to successfully withstand the challenges posed by COVID-19.
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This is especially true for so-called “stakeholder CEOs,” those who see their mission as serving stakeholders as well as the shareholders who own the company. The study found that stakeholder CEOs, who accounted for 39 percent of the more communicative CEOs, outperformed their peers by an average of 3.75 percent.
“This shows that those CEOs who are communicating and showing leadership and empathy in areas not directly related to their bottom line are better at building trust with shareholders and stakeholders,” the study says. “This makes them far more resilient when a crisis hits.”
The importance of speaking out extends across all market sectors, the study found. For the two largest groups, almost nine of out ten (89 percent) of the healthcare companies had vocal CEOs, and tech firms were close behind at 78 percent.
While female CEOs accounted for only six of the 128 CEOs that were included in the study, all of them fell into the more-communicative category. That includes Lisa Su, the CEO of semiconductor company AMD, which was the second-best performing company in terms of share price growth. When asked how she got the company on board with her plan to shift its focus toward only those products for which AMD was a leader, she said “extreme communication.”
FTI evaluated the companies with the highest growth in their share prices between Jan. 1, 2015, and Dec. 31, 2019.
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