Psychopathic Traits of Corporate Leadership as Predictors of Future Stock Returns

47 Pages Posted: 13 Jun 2017 Last revised: 1 Jul 2018

See all articles by Tomasz Piotr Wisniewski

Tomasz Piotr Wisniewski

Open University, UK

Liafisu Yekini

Coventry University

Ayman Omar

University of Leicester

Date Written: June 12, 2017


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.

Keywords: Corporate Psychopaths, Stock Market Returns, Shareholders’ Wealth, Behavioral Finance 

JEL Classification: D22, G02, G12, G14, G34

Suggested Citation

Wisniewski, Tomasz Piotr and Yekini, Liafisu and Omar, Ayman, Psychopathic Traits of Corporate Leadership as Predictors of Future Stock Returns (June 12, 2017). Available at SSRN: or

Tomasz Piotr Wisniewski (Contact Author)

Open University, UK ( email )

Walton Hall
Milton Keynes, Buckinghamshire MK7 6AA
United Kingdom

Liafisu Yekini

Coventry University ( email )

William Morris building
Coventry Business School, Gosford Street
Coventry, CV1 5DL
United Kingdom

Ayman Omar

University of Leicester ( email )

Fielding Johnson Building
University Road
Leicester, LE1 7RH
United Kingdom

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