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The Charismatic Leader’s Edge: A Literature Review on CEO Extraversion and its Impact on Financial Performance

Author

Listed:
  • Zulyanti Abd Karim

    (Faculty of Accountancy, Universiti Teknologi MARA Cawangan Kedah, Kampus Sungai Petani 08400 Merbok, Kedah, Malaysia)

  • Roshidah Safeei

    (Faculty of Accountancy, Universiti Teknologi MARA Cawangan Kedah, Kampus Sungai Petani 08400 Merbok, Kedah, Malaysia)

  • Salsabila Aisyah Alfaiza

    (School of Economics and Business, Telkom University, Bandung, Indonesia)

Abstract

CEO personality traits, particularly extraversion, have garnered increasing attention for their potential influence on organizational outcomes, yet existing research offers fragmented insights into how this trait specifically affects financial performance. This study aims to synthesize and critically evaluate the literature on CEO extraversion and its relationship with firm financial outcomes. Employing a narrative review methodology, data were collected from the Scopus database using targeted search strings to identify relevant peer-reviewed articles. The analysis integrated theoretical perspectives from Upper Echelons Theory and Trait Activation Theory to explain how CEO extraversion influences strategic decision-making, stakeholder engagement, and performance under varying environmental conditions. Key findings suggest that extraverted CEOs tend to enhance firm performance through assertiveness, optimism, and communication, although such traits may also lead to excessive risk-taking during periods of uncertainty. The study contributes theoretically by bridging psychological traits and strategic outcomes, and practically by guiding boards in executive selection and governance practices. These insights provide a foundation for future empirical research to further examine personality-performance dynamics across industries and cultural contexts.

Suggested Citation

  • Zulyanti Abd Karim & Roshidah Safeei & Salsabila Aisyah Alfaiza, 2025. "The Charismatic Leader’s Edge: A Literature Review on CEO Extraversion and its Impact on Financial Performance," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 2480-2486, September.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:2480-2486
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    References listed on IDEAS

    as
    1. Biljana Adebambo & Robert M. Bowen & Shavin Malhotra & Pengcheng Zhu, 2024. "CEO extraversion and the cost of equity capital," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 47(4), pages 981-1020, December.
    2. Theophilus Lartey & Kwabena Kesse & Albert Danso, 2020. "Ceo Extraversion And Capital Structure Decisions: The Role Of Firm Dynamics, Product Market Competition, And Financial Crisis," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 43(4), pages 847-893, December.
    3. Wang, Zongjun & Wang, Peng & Du, Yao & Lin, Chih-Yung, 2025. "The effect of CEO extraversion on private debt," Finance Research Letters, Elsevier, vol. 76(C).
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