The influence of economic context on the relationship between chief executive officer facial appearance and company profits

Inferences of leadership ability and personality from faces have been associated with leaders' efficacy across multiple domains. One influential factor that has only been scarcely explored, however, is the context in which leadership occurs. The present studies examined the effect of two such contextual variables: economic conditions across time and economic conditions across nations. In Study 1, inferences of leadership ability from the faces of American Chief Executive Officers (CEOs) predicted their companies' financial performance prior to the Financial Crisis of 2008 but not after. In Study 2, traits previously found to predict the success of American CEOs before the Financial Crisis (i.e., Power) predicted the success of CEOs in Germany in the year following the crisis but not in the US, consistent with the differential impact of the international recession in the two nations. These results suggest that economic events may affect the relationship between facial appearance and business leaders' success.