Value-based Leadership
Abstract: 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 have 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.
