In recent years, as corporate ESG (Environmental, Social and Governance) goals have gained  prominence and so-called “Millennials” and “GenZers” have entered the workforce,  a sense has emerged in the media and among some academics that CEOs and other top executives should focus more on social skills.  For example, Hansen, Sadun, Ramdas, and Fuller (2021) find that job descriptions for open  executive positions emphasize such skills, especially for CEOs.  Pfeffer (2015 and 2022), in contrast, suggest that little has changed: Successful leaders have always “built their power bases, embraced ambiguity, eschewed popularity contests, adapted and mastered the science of influence.”

In a new study, we compare these two views using an extensive database of over 4,900 assessments of candidates for top management positions, including almost 1,300 assessments of CEOs from 2001 to 2019.  A typical assessment is requested by a private equity investor as part of its due diligence when evaluating a potential investment in a company.  More than half of the CEOs in the sample are assessed as part of such due diligence.

The data contain assessments of candidates who were considered but not hired for an executive position and candidates who got the job. The data, therefore, allow us to study trends in both the supply of managerial talent and the types of candidates who get the job, i.e, the corporate demand for different types of executives.

For the statistical analysis, we perform an analysis that distills executive characteristics into four primary factors: general ability, execution ability versus interpersonal skills, charisma versus analytical skill, and creative/strategic thinking versus attention to detail.

Our main focus is on changes over time.  In a nutshell, we do not find an increase in CEO interpersonal or other “soft” skills.  After the global financial crisis (GFC), the average interviewed CEO candidate has lower overall ability, is more execution oriented and less skilled at interpersonal relations, less charismatic, and less of a creative/strategic thinker than pre-GFC.  Except for overall ability, these differences persist in hired CEOs.  If anything, interpersonal and other soft skills decline over time for CEO candidates and hired CEOs.

It seems that, while job descriptions may have evolved to focus on social skills as in Hansen et al. (2022), the candidates who are considered and hired as CEOs do not appear to have stronger interpersonal and social skills. The foundation of corporate leadership, at least for now, remains the time-tested skills of strategy, execution, and analysis.

This post comes to us from Yann Decressin at the University of Chicago, Steven N. Kaplan at the University of Chicago’s Booth School of Business, and Morten Sorensen at Dartmouth College’s Tuck School of Business. It is based on their recent article, “Have CEOs Changed?” available here.