Does CEO Founding Status Matter? A Study of CEO Personality and Behavior

Abstract

Objectives The main objective of this study was to test whether a CEO’s founding status (founder versus non-founder of their company) is related to CEO personality traits and leadership behavior when tested as quantitative self-assessment. In addition to this general inquiry, another objective was to examine whether there is a significant or noticeable connection between a CEO’s personality and behavior when tested in light of founding status.

Summary This thesis researches the effect of CEO founding status on CEO characteristics. Specifically, Finnish CEOs’ personality and leadership behavior are studied using a self-administered questionnaire. The Big Five personality traits and Blake and Mouton managerial grid are used to create different leadership profiles for founder and non-founder CEOs.

Conclusions Based on quantitative analysis, a CEO’s founding status has a small to moderate effect on CEO personality, and a small effect on CEO behavior. Founder-CEOs are found to be more extraverted and less emotionally stable than non-founder CEOs. Both types of CEOs have a similar leadership style, which is characterized by simultaneous people and task-orientation, although founder-CEOs rate themselves slightly higher in this category. No connection between these separate findings can be established in this study. Overall, this research offers strategic insight into CEO selection and succession planning.