15433: Cognitive Ability and Psychopathy in Founder Versus Professional CEO Leadership (session 25825)

Applying person-work fit theory within an upper-echelons framework, this study investigates how cognitive ability and psychopathy differentially influence firm performance in professionally versus founder led companies. Utilizing panel data (2009-2021) comprising approximately 4,000 Finnish CEOs, our results suggest that the cognitive ability of professional CEOs has a stronger positive effect on the performance of their firms, while psychopathy is more positively associated with performance in founder-led companies. Moreover, supplemental analyses demonstrate that the differences in these traits between founder and professional CEOs and their impact on firm performance remained stable or intensified over time. Specifically, the performance advantages linked to cognitive ability for professional CEOs continued to escalate, while those associated with psychopathy in founder CEOs held steady. These results suggest that the interplay between CEO traits and firm performance is contingent upon both the leader's status as a founder or professional and tenure as CEO, offering nuanced insights that extend knowledge regarding person-work fit within the upper-echelons of organizations. Additionally, the findings offer insights into the distinction between management and entrepreneurship domains, emphasizing how applied psychology and organizational behavior can shed light on the unique characteristics of each.

view paper (if available)