Professor Richard Watermeyer will be undertaking this research with Thanos Verousis at Essex Business School and Pietro Perotti in the School of Management at the University of Bath.

To date, increasingly Vice Chancellors (VCs) are seen as Chief Executive Officers (CEOs) of Higher Education Institutions. The behavioural corporate finance literature has shown that CEO narcissism is associated with increased risk taking and higher firm volatility but also an increase in firm value and, importantly, increase in innovation. Surprisingly, the higher education literature is silent about the effect of VC personality traits on Key Performance Indicators. This project therefore aims to develop a university performance model that accounts for the impact of VC personality traits on university performance.

In 2018, almost half of the universities in the UK payed their Vice Chancellors (VCs) more that £300K in salaries and bonuses (Office for Students, 2019). A criticism that often appears in the media is that VCs’ pay is not in line with the pay of their public sector peers, for example the chief executives of NHS Trusts. VCs appear to emphasize the fact that this is a benchmark error similar to the one appearing in investment performance evaluation. That is, (i) VCs are Chief Executive Officers (CEOs) of Higher Education Institutions (HEIs), and (ii) their compensation packages are lower than their peers in the private sector.

The literature on VCs as CEOs is growing. There is some evidence to suggest that research-intensive universities are led by top researchers (Goodall 2006 and 2009). However, recent research suggests that most of the variability in university performance is explained by non-leadership factors (Breakwell and Tytherleigh, 2010) and that the increase in VC pay cannot be explained by change in university performance indicators (Bachan and Reilly, 2015).

Equally, a common thread in the behavioural finance and higher education literature is the investigation of what makes a good leader. In the behavioural finance literature, CEO personality characteristics are found to play an important role in firm performance (Malmendier, 2018).

Prof. Richard Watermeyer said, "We've only just begun the research and about to kick-start data collection. The project runs for a year though we'll be hoping publish findings from the summer in the academic trade press, mainstream media, blog posts and other forms of social media dissemination".