Psychopathic Traits of Corporate Leadership as Predictors of Future Stock Returns

Ayman Omar, Tomasz Piotr Wisniewski, Sina Yekini

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)
5 Downloads (Pure)


This paper examines whether it is possible to forecast one-year-ahead returns of individual companies based on the observed ‘psychopathic’ characteristics of their top management team. We find that language characteristic of psychopaths present in annual report narratives, questionable integrity, excessive risk-taking and failure to contribute to charitable undertakings tend to reduce future shareholder wealth. These findings imply that firms could benefit from incorporating psychological evaluation in their recruitment processes, especially when seeking to fill senior management posts. While the return predictability described in this paper supports the upper echelons perspective, it simultaneously challenges the notion of informationally efficient stock prices.
Original languageEnglish
Pages (from-to)1196-1228
Number of pages33
JournalEuropean Financial Management
Issue number5
Early online date7 Oct 2019
Publication statusPublished - Nov 2019


  • Corporate Psychopaths
  • Stock Market Returns
  • Shareholders’ Wealth
  • Behavioral Finance


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