Thursday, Sep 10, 2026 The claims desk. Receipts included. POWERED BY LENZ
IsThis

CEOs have real but heterogeneous effects on company performance.

The Claim

Chief executive officers have less influence on company performance than is commonly assumed.

The Short Version

Research supports a real CEO effect, but its magnitude remains disputed. Some studies find earlier estimates were inflated by chance and external conditions; others report substantial effects using different methods and causal evidence. Because “commonly assumed” is never measured, the evidence cannot establish the claim’s central comparison, even though popular perceptions may overstate CEO control.

Caveats

  • “Commonly assumed” is undefined and is not directly measured by the cited research.
  • Estimated CEO effects vary substantially with methodology, performance measure, industry, firm type, and time period.
  • Evidence that CEOs materially affect performance does not establish how their influence compares with public perceptions.

The Receipts

  1. The use of variance decomposition in the investigation of CEO effects: How large must the CEO effect be to rule out chance?

    Strategic Management Journal

  2. Managing with Style: The Effect of Managers on Firm Policies

    The Quarterly Journal of Economics

  3. How much do CEOs really matter? Reaffirming that the CEO effect is mostly due to chance

    Strategic Management Journal

  4. Toward more accurate contextualization of the CEO effect on firm performance

    Strategic Management Journal

  5. Has the “CEO effect” increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders

    Strategic Management Journal

  6. Reaffirming the CEO effect is significant and much larger than chance: A comment on Fitza (2014)

    Strategic Management Journal

  7. The Demand for Executive Skills

    National Bureau of Economic Research

  8. CEO Behavior and Firm Performance

    Harvard Business School

  9. The CEO effect and performance variation over time

    The Leadership Quarterly

  10. CEO Behavior and Firm Performance

    National Bureau of Economic Research

+ 15 more sources — see the full list on Lenz

Filed Under

Chief Executive OfficersCompany Performance