Winning the confidence of investors
The leadership premium
Based on a global survey of investment bankers, private equity companies, and financial analysts, Deloitte’s study The Leadership Premium: How companies win the confidence of investors puts a quantitative metric on the effectiveness of leadership to help businesses understand the impact that leadership can have on their performance and market value.
The report reveals that the quality of senior leadership—including core capabilities as well as personal qualities such as honesty and integrity—has a direct, and measurable, impact on analysts’ assessments of whether companies have been successful and will be successful in the future.
More than 50 percent of stock market analysts surveyed routinely factor leadership into their valuations—and 80 percent award a premium for particularly effective senior teams.
The report indicates that analysts look for three core components when assessing an organisation’s leadership strength:
- Strategic clarity – a clear vision of what the organisation needs to achieve.
- Successful execution – proven ability to meet objectives.
- A culture of innovation – commitment to enterprise; an environment for ideas.
In addition, analysts look for two attributes that support these components: effective corporate governance and effective leadership characteristics.