Chief executives get more reflective about what really matters in life when they approach a certain age. Good for them, but according to a recent study, it’s not good for their companies.
The study, The Big Birthday Crisis, looks at the performance of 1,100 companies when their chief executives approach a new decade in life (so those aged 39, 49 and so on).
Psychology research has found people often “enter a temporary period of crisis” at such times, characterised by “introspection and self-assessment”.
Chief executives are no different. They become “more authentic during conference calls”, indicating “heightened self-awareness and stronger alignment with personal values”. Unfortunately, investors don’t appreciate this authenticity, with such companies having “decreased operating performance, firm value and long-term investments”.
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One tongue-in-cheek solution, suggests 49-year-old Liberum strategist and blogger Joachim Klement, is for firms to fire their chief executives “before they ruin the company with their reflections on life”. Besides, he adds, “being fired on their 59th birthday will make it all the clearer to them that they truly should question past life choices”.
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