The Facial Appearance of CEOs: Faces Signal Selection but Not Performance

Abstract

Research overwhelmingly shows that facial appearance predicts leader selection. However, the evidence on the relevance of faces for actual leader ability and consequently performance is inconclusive. By using a state-of-the-art, objective measure for face recognition, we test the predictive value of CEOs’ faces for firm performance in a large sample of faces. We first compare the faces of Fortune500 CEOs with those of US citizens and professors. We find clear confirmation that CEOs do look different when compared to citizens or professors, replicating the finding that faces matter for selection. More importantly, we also find that faces of CEOs of top performing firms do not differ from other CEOs. Based on our advanced face recognition method, our results suggest that facial appearance matters for leader selection but that it does not do so for leader performance.

Explaining the persistent influence of facial cues in social decision-making.

“…Despite their poor predictive validity, face judgments influence decisions ranging from the relatively trivial choice of which apartment to rent (which might determine the fate of the next vacation; Ert et al, 2016), to the selection of a CEO (which might determine the fate of a company; Gomulya et al, 2016;Graham, Harvey, & Puri, 2017;Stoker, Garretsen, & Spreeuwers, 2016), to the sentencing of a criminal (which might determine the fate of a human being; Blair, Judd, & Fallman, 2004;Eberhardt et al, 2006; J. P. Wilson & Rule, 2015). It may thus not be surprising that researchers have called for a more nuanced understanding of why people persistently rely on face judgments (Olivola et al, 2014).…”

The face of risk: CEO facial masculinity and firm risk

“…Haselhuhn, Ormiston, and Wong (2015) summarize that fWHR is a small but a significant predictor of men's aggression. In contrast, Stoker, Garretsen, and Spreeuwers (2016) run principal component analysis (PCA) based on the intensities of pixels of the face pictures, using a sample of CEOs and non-CEOs. They find that CEO faces are significantly 7 We deeply appreciate the advice of Christian Leuz for this part of our study.…”

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“…People in certain professions seem to be in some way similar looking. For example, it has been shown that business leaders look different from the general public or university professors, and this seems not to be related to the level of their competence (Stoker, Garretsen, & Spreeuwers, 2016). On the other hand, research has shown that in some cases it is the context which makes significant contributions in judgments.…”