So Much for Being Emotionless

Harvard Business Manager — February 2025

Lauren Howe, a professor of management at the University of Zurich, discusses her research on how CEOs’ expressions of empathy during the COVID-19 crisis affected their companies’ stock performance. The study analyzed transcripts from earnings calls of 448 publicly listed U.S. firms during early 2020. It focused on identifying “Human Care Statements” (HCS), in which CEOs expressed concern for employees or other stakeholders. Remarkably, companies whose CEOs made such statements saw a 2.49 percentage point higher cumulative return and reduced stock volatility compared to those that did not. Each additional HCS was associated with roughly $78.9 million less in company value loss.

The effect occurred regardless of whether the statements included concrete actions or were general expressions of care. Even vague, empathetic language was linked to better market performance, suggesting that frequency—not specificity—was the key factor. The study also controlled for variables like company culture and debt ratio to isolate the impact of HCS.

Howe concludes that empathy in leadership is not only good for employee satisfaction but also financially beneficial. However, she emphasizes the need for further research into why some CEOs use empathetic messaging while others do not, whether strategic use of such messages could be seen as manipulative, and if empty words without action could backfire in the long term. The findings suggest that empathetic communication, even in high-stakes financial settings, can play a critical role in how companies are perceived by the market.

Article by Mia Stöckel