“Strong” CEOs Outperform When Conditions Are Fluid [Study]

As much as people may praise great CEOs like Steve Jobs, it’s not at all clear that having a strong CEO is a good thing for most companies. Many studies find that strong CEOs result in lower firm value, and others show that strong CEOs take their companies to the top or bottom of the pile, with weaker CEOs turning in moderate performance. It’s not a purely academic matter either, knowing when strong CEOs are most effective could impact the way directors and shareholders behave.

“Unconditional measures of CEO power show a negative relation with firm value,” write Minwen Li and Yao Lu at Tsinghua University and Gordon Phillips at University of Southern California and the NBER, write on the...