What CEOs Say Matters More Than You Think

When a new CEO takes the reins, investors, employees, and board members all ask the same question: Can this person lead?

Traditionally, the answer emerges over time through share prices, strategic pivots, and revenue growth. But new Korn Ferry research suggests there is another way to evaluate leadership effectiveness: by listening closely to what CEOs say during earnings calls.

By analyzing the communication styles of S&P 500 CEOs, Korn Ferry found a correlation between language and performance. Leaders who consistently reflected certain leadership qualities in their speech outperformed their peers by 12% in stock growth. Those who didn't lagged their sectors by 15%.

Long viewed as financial briefings, earnings calls can also serve as moments of visible leadership, experts say. “As our research shows, these calls can reveal how leaders think, prioritize, and connect with stakeholders before those choices show up on a balance sheet,” says Daniel Yim, director and chief of Staff for Korn Ferry’s Board and CEO Services practice.

How CEO Language Predicts Market Success

Quarterly earnings calls are among the few times when CEOs speak directly to investors and analysts. Even when their remarks are scripted, their language offers insight into their mindset—whether they’re future-focused or reactive, collaborative or self-centered, transparent or evasive.

Korn Ferry researchers reviewed call transcripts from 90 S&P 500 companies that underwent CEO transitions between 2015 and 2016, focusing on each new leader’s first 18 months—a critical point when strategic initiatives begin to take shape. Using a hybrid human-AI approach, they identified eight leadership themes tied to market performance:

1. External Awareness: understanding the broader business landscape
2. Strategic Foresight: anticipating and preparing for future opportunities
3. Competitive Position: clearly articulating what makes the company different
4. Portfolio Management: focusing on the right priorities and initiatives
5. Resource Allocation: investing wisely in people and capital
6. Value Integration: balancing short-term results with long-term needs
7. Managing Accountability: setting clear expectations for senior leaders
8. Egocentricity: highlighting personal accomplishment

Their findings show that CEOs who emphasized the first seven themes tended to outperform the market. Those who relied on self-focused language—using “I” far more than “we”—often fell behind sector averages. Top performers spoke about success in collective terms and reinforced shared accountability.

“When leaders speak in terms of ‘we’ and ‘team,’ they’re signaling shared ownership and trust,” says Guangrong Dai, senior director of research in the Korn Ferry Institute, Korn Ferry’s research arm. “That’s both good communication and good leadership.”

To identify patterns, researchers combined human review with AI-powered linguistic analysis to examine both what leaders said and how they framed it. Words like “we,” “team,” “partnership,” and “future” appeared more often among high performers, as did language tied to accountability and measurable outcomes. Underperforming CEOs, on the other hand, tended to either avoid discussing competition and long-term strategy or use more vague, self-referential phrasing.

This pattern held across industries, suggesting that CEO communication style—not sector—was the differentiator.

Why CEO Communication Matters Now

Every word from the corner office carries weight. Investors, employees, and the public all take cues from how CEOs speak about performance and purpose. Clear, authentic communication builds trust; ambiguous, evasive, or self-centered language erodes it.

“The most powerful tool a leader has is language,” says Melissa Gordon, senior client partner in Korn Ferry’s CEO and Leadership Development practice. “The right words at the right time can change a company’s trajectory.”

Thanks to advances in AI, organizations can now analyze non-traditional data sources like earnings calls to assess executive effectiveness well before financial results are visible. And as these tools evolve, they could offer even deeper insights into leadership behaviors, experts say.

This approach could also strengthen leadership development and coaching. By flagging early signs of challenges—like limited strategic foresight—organizations can deliver targeted support before performance gaps emerge. “Companies will be able to develop stronger, more self-aware leadership at every level,” Dai says.

Ultimately, Korn Ferry’s study reinforces that language reflects leadership. With every quarterly call or public statement, a CEO’s words reveal who they are as a leader—their priorities, their mindset, their focus, their capacity to influence others.

“We know that leaders who bring strong strategic vision, ability to inspire, and focus on communicating effectively perform better over time,” says Evelyn Orr, Korn Ferry’s head of CEO and executive assessment in North America.

In fact, Korn Ferry’s outcomes research found that CEOs who excel in Strategic Vision, for example, achieved 30% higher annual growth during their first four years in the role. “The good news is, leaders who want to have more impact can improve in these areas,” Orr adds.

Or, as Gordon puts it, “Great leadership may begin not with a strategy, but with a sentence.”

For more information, find out more about Korn Ferry’s Board & CEO Services.

Click here to download the full study.