IDEA #27

How to tell if a leader is lying

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Lots of superlatives and talk of ‘the team’ – you might be listening to a lie.

What you need to know

Analysing nearly 30,000 transcripts of conference calls led by American CEOs or CFOs held between 2003 and 2007, David Larcker and Anastasia Zakolyukina of Stanford’s Graduate School of Business may have found the tell-tale signs of lying leaders. Analysing the utterances of leaders in the conference calls when discussing company profits who later ‘materially restated’ their financial position (and using this chain of events as a proxy for potential fibbing) the professors noted two linguistic traits ...

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