Using handwriting analysis as a recruitment tool — as some City banks once did — is out of fashion. Yet judging company bosses by how they write their names is surprisingly common in academic circles.
Scrutinising signatures is a ploy used by the swelling ranks of academics researching the link between corporate performance and leaders’ personality traits. The latest such study suggests chief executives with sprawling signoffs are particularly likely to announce big share repurchases, which they do not necessarily implement.
An earlier paper made a link between large autographs and poor performance, including overspending on acquisitions. Leaders with extravagant signatures were more lavishly paid than those with smaller scribbles. They are also likely to talk up their commitment to corporate social responsibility. Saving the world is an attractive platform for self-aggrandising CEOs, cynics might conclude.
Researchers argue that the size of signatures — available from annual reports — is a proxy for narcissism. That trait is characterised by attention-seeking, lack of empathy and an inflated self image. They established the link by comparing volunteers’ signatures to their scores on personality tests.
Other clues to a chief executive’s personality are how often they say “I”, the size of their photograph in an annual report and where their quotes are placed in a press release.
Another approach is to ask fellow directors to assess a CEO. When Stanford University researchers took that tack last year, they concluded that one in six chief executives displayed moderate-to-high narcissism. That makes narcissism about three times more prevalent among CEOs than in the general population.
This should occasion CEOs an uncharacteristic moment of introspection. They will bounce back with the news that the Stanford researchers found chief executives have a fairly healthy personality profile, on average. Even the narcissists were found to have some saving graces including — surprisingly — a greater likelihood of running companies with good governance features.
Narcissists can make inspirational leaders. Self-confidence and risk tolerance help take executives to the top. But there is growing recognition they can damage a business’s performance and culture. Bosses with toxic personalities should watch their step.
The Lex team is interested in hearing more from readers. Please tell us whether you think narcissism is a useful or dangerous CEO trait in the comments section below