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Wednesday October 19, 2016
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Berkshire Hathaway CEO Warren Buffett poses with Tinku Jain at the Berkshire-owned Borsheims jewellery store where Buffett was selling jewellery as part of the company annual meeting in Omaha, May 4, 2014. — Reuters picBerkshire Hathaway CEO Warren Buffett poses with Tinku Jain at the Berkshire-owned Borsheims jewellery store where Buffett was selling jewellery as part of the company annual meeting in Omaha, May 4, 2014. — Reuters picKUALA LUMPUR, Oct 19 — An Australian university’s preliminary research has found that Malaysian companies run by less narcissistic CEOs outperformed those headed by more egoistic people.

The study by Professor Alex Frino and Dr Daniel Maroney from the University of Wollongong released today sampled seven companies listed on Malaysia’s stock exchange and their CEOs: Malayan Banking Berhad (Datuk Abdul Farid Alias), Petronas Chemicals Group Bhd (Datuk Sazali Hamzah), IHH Healthcare Bhd (See Leng Tan), Axiata Group Bhd (Tan Sri Jamaludin Ibrahim), DiGi.com Bhd (Albern Murty), Telekom Malaysia Bhd (Zamzamzairani Mohd Isa), and AMMB Holdings Bhd (Sulaiman Mohd Tahir).

“The average return on Malaysian companies run by the least narcissistic CEOs produced investment returns of 0.52 per cent per month for the period, while those run by the more narcissistic CEOs generated investment returns of 0.46 per cent per month,” said the executive summary of the study.

“The results of this study are preliminary as the sample size used is quite small. However, the results are consistent with previous research and therefore represent preliminary evidence that companies run by narcissistic CEOs are likely to underperform,” it added.

The study looked at three-year stock returns as of December 31 2015 and measured CEO narcissism by analysing the speech of the CEOs in interviews carried out during analyst briefings in the English language.

Narcissism was defined by obtaining the ratio of first person singular pronouns (I, me, my, mine, myself) to total first person pronouns (I, me, my, mine, myself, we, us, our, ours, ourselves) in the CEO’s speech.

The study, which also analysed 17 companies listed on the Singapore exchange, found similar results for Singaporean companies.

“The average return for Singaporean companies run by the least narcissistic CEOs produced investment returns of 0.74 per cent per month for the period while those run by the more narcissistic CEOs generated investment returns of 0.50 per cent per month,” said the study.

The study found that the median narcissism score was 0.3 or 30 per cent.

The authors of the study had found a correlation between higher CEO narcissism and lower investment returns in a previous research on the largest companies listed on the Australian Securities Exchange.

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