The Impact of Leadership – Corporate Governance

To print this article, all you need to do is be registered or log in to Mondaq.com.

No leader has a single style of leadership, and it can change depending on circumstances, age and stage of the business as well as the economic, social and business environment.

Transformational

especially non-family CEOs

Impact: Companies led by transformational leaders typically generate good financial results as well as social and environmental progress, while strengthening family loyalty and identification with the company.

Charismatic

especially family CEOs

Impact: Family businesses led by charismatic leaders generally show better financial, internal and external social results and are able to create strong ties between the family and the business.

Authoritarian

Impact: The primary impact of an authoritarian/patriarchal leadership style is seen in the strength of family ties and their emotional attachment to the business.

A transformational leadership style was the overall preference of CEOs across all regions.
Transformational Leaders change the core values, beliefs and attitudes of their “followers”, making them willing to perform beyond the minimum levels required by the company.

Respondents’ second preference was
charismatic style. A charismatic leader has the power of persuasion and the ability to motivate his followers who usually show great reverence and personal confidence in his leader. They have a strong sense of collective identity, feelings of empowerment and believe in the importance of group performance as a whole.

The authoritarian Leadership (or paternalistic) style was the least important among survey respondents. Authoritarian leaders exercise powerful authority over their subordinates. Although this was the least preferred option overall, it appeared more often among CEOs in the Middle East and Africa and parts of Asia.

1200610a.jpg

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: Malta Company/Commercial Law

Helen D. Jessen