The CFO has also forged relations with the board, sometimes directly reporting to influential directors. Indeed, the CFO almost automatically gets included in the short list of many CEO-selection committees. There is no dearth of recent examples of CFOs-turned-CEOs, among them PepsiCo’s Indra Nooyi, Chua Sock Koong at SingTel, James Bell at Boeing, José Luis Duran at Carrefour and Kewal Kanda at Pfizer India.

 

So I was intrigued when researchers at the U.S. National Bureau of Economic Research, the organisation that determines when U.S. recessions start and end, published a new study entitled “A Corporate Beauty Contest.” The research focused on one question: Do facial features matter in the selection of a company CEO? The findings by John Graham, Campbell Harvey and Manju Puri suggest that, yes, the way you look can influence whether or not you will end up with the top job.

 

The study also suggests that looks influence how much CEOs get paid, too. Those CEOs the respondents judged to be competent-looking tend to be working with bigger companies, compared to CEOs judged as less competent-looking, who tend to work in smaller firms, and thus are likely to receive a less sizeable compensation package.  

 

The researchers note that previous studies indicate that there is a “beauty premium” in the workplace. For example, Daniel Hamermesh and Jeff Biddle found in 1994 that workers of above-average beauty earn more than workers with below average looks. In 2005, Alexander Todorov and three colleagues demonstrated that the appearance of being competent is a good predictor of the outcome of U.S. congressional elections.

 

“The appointment of a CEO is often a heavily contested process,” Graham, Harvey and Puri observe. “This situation differs from that of politicians insofar as there is not only a long track record available on chief executive candidates and the eventual winner, but the decision as to who is appointed CEO is likely made by a handful of people intimately familiar with the track record of the CEO candidates. In such situations, where there is ample information about past record and performance, and the decision is made by a handful of informed people, do looks still matter?”

 

To answer the question, they designed a web-based study involving about 2,000 business and graduate students who were shown pictures of actual CEOs and non-CEOs of the same gender, race, and of similar age. The respondents were asked to assess the appearance of the CEOs and non-CEOs on four dimensions: beauty, competence, trustworthiness and likeability. The respondents were also shown pictures of CEOs of large firms and small firms and asked to assess their facial traits on the same four dimensions.

 

The results were intriguing. “We find two facial traits that consistently distinguish between CEOs and the control group [of non-CEOs]: competence and likeability,” the researchers write. “Our results indicate that individuals who appear more competent and less likable are more likely to be CEOs. We similarly find these two traits are also significantly related to the CEO heading a larger company.”