The New Leadership Equation: The Market Rewards Results-Oriented CEOs with a Collective Focus

This article discusses research findings for informational and educational purposes only. This is research and analysis, not investment advice. Receptiviti is not a registered investment advisor. Our analysis is meant to flag potential areas for additional diligence but is not meant to provide trading or investment advice. Past research findings describe historical relationships and do not guarantee future results. Market performance is influenced by numerous factors. Investors should conduct independent analysis and consult with qualified financial advisors before making investment decisions. 

For decades, the corporate world has operated on a simple premise: effective CEOs are ruthless achievers. They're competitive, assertive, and singularly focused on results. This agentic leadership style, which is characterized by dominance, self-efficacy, and individual goal pursuit, has long been treated as table stakes for anyone aspiring to lead a publicly traded company.

But new research published by academics in partnership with Receptiviti challenges this one-dimensional view of leadership effectiveness. Using advanced language analysis of over 200,000 quarterly earnings calls from more than 3,500 CEOs, this new research flags something that should fundamentally change how we think about leadership: communion - the ability to build relationships, foster collaboration, and create caring organizational cultures.

Communion is not just a "nice to have." Research found it was significantly associated with superior market performance.

The Study: Measuring Leadership Through Language

Leveraging Receptiviti’s technology, the authors analyzed the unscripted portions of CEOs' quarterly earnings calls, where leaders respond spontaneously to analyst questions. Unlike prepared speeches, these Q&A sessions reveal authentic leadership styles through natural language patterns.

Using advanced computational linguistics methods, the researchers measured two fundamental dimensions of personality:

Agency reflects achievement orientation, competitiveness, and individual goal pursuit, the classic markers of leadership strength.

Communion captures relationship-building, collaboration, and concern for collective wellbeing, traits often dismissed as secondary in business contexts.

The research team measured personality and linked it directly to objective financial performance using the Fama-French three-factor model, which calculates stock returns above and beyond what standard market forces would predict. This approach reveals whether leadership style creates genuine economic value or merely reflects existing market conditions.

Communion Drives Performance

The results were straightforward: CEOs who used more communal language in their earnings calls led companies with significantly better financial performance, measured by excess stock returns month over month. This held true across both small and large firms, and the effect remained significant even when controlling for time and known market factors.

Perhaps most surprisingly, agency alone - those who have a singular focus on achievement and results - showed no significant correlation with superior market performance.

This doesn't mean agency is unimportant. Rather, it suggests something more nuanced and consequential: among CEOs of publicly traded companies, high agency is effectively universal. These leaders have already been filtered for competitiveness, assertiveness, and achievement drive. In this elite population, agency becomes table stakes; agency is necessary but insufficient for exceptional performance.

Communion, by contrast, varies widely among CEOs. And that variance correlates with value creation.

The Portfolio Test: High Agency + High Communion Wins

To illustrate the practical implications, researchers divided CEOs into four groups based on their agency and communion scores, treating each group as a distinct stock portfolio:

1. High Agency + High Communion

2. High Agency + Low Communion

3. Low Agency + High Communion

4. Low Agency + Low Communion

The results were clear: companies led by CEOs high in both agency and communion significantly outperformed all other groups. These balanced leaders demonstrated the strongest positive trajectory in monthly excess returns.

The worst performing group was high agency with low communion; a grouping characterized by what psychologists call "unmitigated agency." These CEOs possessed drive and competitiveness but lacked the communal counterbalance of relationship-building and collective concern. The research suggests why: unmitigated agency correlates with problematic traits, and a willingness to pursue personal agendas without regard for broader stakeholder interests.

Why Communion Matters: Culture, Trust, and Long-Term Value

The mechanism behind communion's impact likely operates through multiple channels:

Internal culture creation.

Communal leaders foster collaborative, psychologically safe work environments where employees feel valued and empowered. This culture of trust and mutual support drives creativity, productivity, and retention, which ultimately reflects in financial performance. Retention of talent and institutional knowledge compounds into competitive advantage over time.

External reputation effects. 

CEOs who authentically prioritize connection stand out to investors, analysts, and partners. Their approach signals confidence, long-term thinking, and genuine concern for sustainable value creation.

Crisis resilience.

Research increasingly shows that communal leadership becomes especially critical during turbulent times including navigating volatility, economic instability, or organizational transformation. Leaders who have built strong relationships and trust can mobilize collective effort more effectively than those who rely solely on authority and achievement drive.

The Danger of Unmitigated Agency

The research aligns with what psychologists have long observed outside of business contexts: high agency without communion is psychologically risky. People who score high on agency but low on communion tend to exhibit elevated rates of antisocial traits. They're more likely to view relationships transactionally, prioritize personal gain over collective welfare, and create toxic work environments.

In the corporate world, this can manifest as leaders who are more inclined to build empires rather than organizations, who optimize for personal legacy rather than sustainable value, and who leave behind cultures that must be rebuilt by their successors.

The data suggests that investors and Boards should view unmitigated agency not as strength but as a warning that can predict volatility, talent exodus, and ultimately, underperformance.

Not a Single Profile: Flexibility and Context Matter

Importantly, this research doesn't prescribe a single "ideal" CEO personality profile. The study found effective leaders across all quadrants, suggesting that various leadership styles can succeed depending on organizational context, leadership alliances, industry dynamics, and strategic challenges.

What distinguishes the highest performers is flexibility; the ability to draw on both agentic and communal capacities as situations demand. These CEOs can be decisive and competitive when necessary while also building trust, fostering collaboration, and prioritizing long-term relationships. They recognize that sustainable success requires both driving toward goals and bringing people along on the journey.

These findings have immediate practical applications:

For Boards and investors: Are we evaluating CEO candidates on authentic capacity for relationship-building and collective concern, or primarily on track record and strategic vision? Does our assessment process look beyond polish and charisma to genuine communal orientation revealed through unscripted behavior?

For executive coaches and leadership development programs: Focus on strengthening communal capacities in high-agency leaders rather than assuming these skills are secondary. Help leaders understand that building relationships and culture is not a distraction from results, but rather a driver of sustainable performance.

For aspiring leaders: Recognize that the path to elite leadership effectiveness requires more than achievement drive. Cultivate genuine interest in others, practice collaborative problem-solving, and invest in relationship-building as core competencies, not soft skills.

Agency gets you to the table. Communion helps you build something worth sustaining.

This research delivers a powerful message backed by rigorous data: in today's business environment, results-focused leadership is necessary but insufficient. The CEOs who create the most shareholder value are those who combine achievement drive with authentic concern for relationships and collective wellbeing. These balanced leaders don't just create better financial returns, they create organizations where people want to work, cultures that attract talent, and legacies that endure. And thankfully, this balanced approach is also rewarded by the market.

This research to practice article references findings from "Language-Based Measures of CEOs' Agency and Communion Predict Company Stock Performance" by Nalabandian, Ireland, Boyd, and Durland (2025), which analyzed over 200,000 quarterly earnings calls from 3,567 CEOs using advanced computational linguistics to link leadership style with objective financial performance.