The impact of leadership

No leader has only one style of leading, and it can change depending on the 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 deliver good financial results as well as social and environmental progress, while also building the family’s loyalty and identification with the business.
Charismatic - especially family CEOs

Impact: Family businesses with charismatic leaders typically show better financial, internal and external social results and are able to build strong bonds between the family and the business.
Authoritarian

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

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

The second-highest preference of the respondents was the charismatic style. A charismatic leader has the power of persuasion and the ability to motivate their followers who generally show great reverence for — and personal trust in — their leader. They have a heightened sense of collective identity, feelings of empowerment and believe in the importance of the performance of the group as a whole.

The authoritarian (or paternalistic) leadership style was the least prominent among the survey respondents. Authoritarian leaders exert powerful authority over their subordinates. Though it was the least preferred option overall, it did appear more often among CEOs from the Middle East & Africa and parts of Asia.