Companies with good leaders are worth up to 35.5 percent more than those with weak leadership, a survey revealed on Thursday.
Analysts said they award an average premium of 15.7 percent on the share prices of companies with effective leadership and levy average discounts of 19.8 percent for those with weak leadership.
This adds up to an “astonishing” gap of 35.5 percent between companies with good and bad leadership, Deloitte’s The leadership premium report said.
The authors of the study interviewed around 500 stock market analysts in the UK, the US, China, India, Japan and Brazil.
The report found that, in addition to financials, analysts look at corporate governance, leaders’ public and press opinion ratings and their personal qualities such as honesty and integrity.
Deloitte also found that 80 percent of analysts base their opinion on a leader on face-to-face meetings.
There are also differences in the effective of good leadership in different sectors. Analysts dealing with consumer goods ascribed an average of 21 percent of company equity to the senior leadership team, compared with 14 percent for technology, media and telecoms (TMT) analysts.
Will Gosling, a partner in Deloitte’s consulting practice, said: “The impact of performance on results is often delayed in industries such as TMT, which are undergoing rapid and radical structural change and are subject to constant innovation. These industries might have to work especially hard to win a leadership premium.”