The relationship between Canadian leadership style and shareholder value: A quantitative correlational study

The purpose of the study was to identify the relationship between leadership style and shareholder value in Alberta's oil and gas sector. Chief executive officers in Alberta's oil and gas industry, a driving force behind the province's economy, could reduce leadership turnover, increase shareholder value, and generate a more positive return to the economy if they could predict which leaders will generate shareholder value more effectively. In the study, shareholder value equaled equity market value multiplied by the difference of return on investment minus cost of equity. The study involved calculating shareholder return for six Alberta oil and gas companies. The Multifactor Leadership Questionnaire Form 5X categorized the leadership style of the leaders in the six companies into transactional, transformational, or laissez-faire leadership. The study involved collecting 50 completed surveys and analyzing the responses into leadership styles through descriptive statistics and regression analysis to determine the relationship between nine leadership style indices and shareholder value. The results indicate a significant positive correlation between transformational leadership style and higher created shareholder value. Within transformational leadership, a significant positive correlation existed with the intellectual stimulation attribute, and a negative correlation existed with the idealized influence as a behavior attribute. The results revealed transactional and laissez-faire leadership do not correlate with higher shareholder value, but the attribute of contingent reward, under transactional leadership, is a positive driver of shareholder value. An implication from the study is that companies with transformational leaders will have higher created shareholder value than companies without transformational leaders.