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For the record

Can CEOs' voices predict company performance?

In March 2011 the USA’s News & Observer published an article about new research[1] which it said showed “that the CEO’s [sic] voice inflection, tone and attitude could predict his or her company’s future stock performance”. The research was carried out throughout 2007 and used “computer software to analyze the emotions in the CEO’s [sic] voices – not the actual words they were saying.”

Here Professor Francisco Lacerda, Department of Linguistics, Stockholm University explains how limitations of the technology used in the research mean we cannot conclude CEOs’ voices can predict company performance:

“The research described in the article uses a technology that cannot produce any meaningful results. The claims made for the ‘layered voice analysis’ (LVA) technology produced by Nemesysco are based on “secret know-how”, anecdotal personal validations and inconclusive or methodologically flawed studies; there is no independent scientific validation of the technology. The patent shows that the LVA-technology functions like a ‘digital dowsing rod’. If the research methodology does not have appropriate controls in place, the observer will just find evidence for his prejudices.”

“Before discussing whether CEOs’ voices can predict company performance, a proper acoustic analysis of the speech data needs to be carried out. This requires a reanalysis of the data using a valid and transparent scientific methodology.” 


Francisco Lacerda, Professor of Linguistics at Stockholm University, and Anders Eriksson, Professor of Phonetics at the University of Gothenburg, co-authored a review article on lie detectors published in the International Journal of Speech Language and the Law in 2007. The article examined the past 50 years of lie detector research and concluded that there is no scientific evidence to show they actually work.

Lawyers representing Nemesysco Limited, an Israeli manufacturer of lie detectors, contacted the journal and demanded the article be removed. The journal, which is published by the British company Equinox, complied.

Nemesysco's lawyers warned Lacerda and Eriksson that they would be sued for defamation should they attempt to publish the article elsewhere

Find out more information about the case

[1] The Power of Voice: Managerial Affective States and Future Firm Performance, William J. Mayew and Mohan Venkatachalam, Journal of Finance, January 20 2011

Document type: For The Record

Published: 11 July 2011

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