The Importance of Great Leaders

The year 2014 ended with a sombre note. An AirAsia (KLSE: 5099) flight, QZ8501, crashed en route from Surabaya to Singapore. While some of the corporate executives decides to stay off social media, allowing their professional handlers to manage the crisis, AirAsia CEO, Mr. Tony Fernandes, stood out and turns to Twitter for crisis management.

What does this mean to investors?

Corporate executives are the leaders of the company they lead. During ordinary times, good leaders are the one leading the company to scale greater heights. But it is usually great leaders are the one who leads the company and walk them out of any crisis the company faces.

A company is not just lead by the corporate executives. The board of directors within a company are all leaders of the company. They are also the ones who shapes the direction of the company.

Confidence in the leaders

Having confidence that the leaders of a company with the ability to lead is one of the factors why investors are willing to part their money and invest in the company. In the AirAsia case, the loss of a plane has got a devastating effect on the company. However, from the stock chart of AirAsia, although the price of the company “gap” down on the day of the crash, the incident did not send the price of the company plunging down. This shows that the investors are still confident about the leadership of Tony Fernandes and his team.

InvestorMonkey - AirAsia stock price when the crash occurred

 

Bottom Line

Most companies will have their share of crisis and only those with great leaders are usually able to survive during times of crisis, prevail and continue to grow. To see how leaders of a company react during a crisis will allow investors to decide whether to continue to follow them or to pull out their investments as these are the people who should be the one who lead the company to scale greater heights on ordinary times and lead the company out of a crisis.

PK-AXR A320-216 Indonesia AirAsia by Steven Byles is licensed under CC BY-SA 2.0.

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