Finance Executive Leadership Competency and Stock Value Trends in the Presence of Increased Regulation

OBJECTIVE
The purpose of this study was to understand the relationship between the leadership competency of public organizational finance leaders and organizational capitalized stock value.

METHODOLOGY
The Leadership Practices Inventory was completed by 106 finance leaders in the same number of public companies listed on the New York Stock Exchange (49% response rate). As the dependent variable, stock trend was traced over 12 months (August 2004-July 2005) to determine increase and decreases in stock value and compared to the Standard & Poor’s 500 composite to establish a baseline of sample representation of stock value.

KEY FINDINGS
A statistically significant correlation was not found between the five leadership practices and stock value trends.