Excerpt
2022, Paper: "Many organizations acknowledge that inclusiveness, or the practice of directly engaging colleagues in activities, is becoming increasingly important as businesses become more complex. However, inclusive leaders remain significantly understudied in large-sample archival research, largely because inclusiveness is difficult to measure. We overcome this barrier and develop a measure of leaders’ inclusiveness by observing the interactions among corporate leaders during conference calls. After validating our measure, we find that inclusive leaders are more likely to be female and older. They are twice as likely as the average leader to be promoted to CEO. Appointing an inclusive CEO results in a three-day abnormal return of 0.8% around the announcement of the appointment, and also increases the inclusiveness of the executive team. Teams composed of inclusive leaders also have greater retention. Lastly, firms where inclusive leaders are promoted to CEO experience higher growth in Tobin’s Q, a result that is concentrated among growth and R&D-intensive firms."
Non-HKS Harvard Faculty Author Website - Ethan Rouen and Yuan Zou