The research, first reported by the Harvard Business Review, was compiled among employees of 84 U.S. companies and non-profits who were asked to rate their CEOs and managers on four moral principles: integrity, responsibility, compassion and forgiveness.
The bosses’ scores were then aligned with their firms’ financial results to try and identify any link between positive character at the top of an organization and its profitability. The results surprised even the KRW researchers: high-scoring CEO-led companies had an average return on assets (ROA) of 9.35% over a two-year period, while those with lower-scoring bosses saw average ROA of just 1.93%.
The report highlighted 10 business leaders who scored outstandingly high on the “character index,” displaying high levels of empathy, integrity, humility – not to mention corporate vision, strategy and accountability. By contrast, the 10 CEOs at the bottom of the ratings showed a tendency to be preoccupied with their personal financial gain, avoid blame and twist the truth to their own advantage.