From USATODAY, March 18, 2008

Look who has his feet to the fire. It’s Phil Knight, the world’s most successful shoe salesman. The Nike chairman is being interviewed on camera about outsourcing jobs to Indonesia. The grilling would make any executive squirm, and worse is that interviewer Michael Moore has built his career on embarrassing those in power. Moore asks if Nike might accept lower profits if it means providing jobs to Americans, then he ambushes Knight with two airline tickets to Indonesia, seemingly so they can inspect shoe factories together.

It’s choreographed to be an awkward moment. Knight declines the trip and says Americans don’t want jobs in a shoe factory. But it’s his facial expressions, not what he says, that tell the most, says Dan Hill, an expert in facial coding, a system of seeing through the mask by classifying hundreds of tiny muscle movements in the face. Based on facial clues, Knight experiences little discomfort. Far from it. Rather, he appears to be enjoying the joust with Moore, Hill says.

Facial coding is not an exact science, and is only now starting to find business applications. It dates back to the 1960s when San Francisco psychologist Paul Ekman found that expressions are learned early and are the same in Japan and Argentina as they are in the USA. Animators have embraced facial coding to make characters such as Shrek seem human. But imagine how facial coding might catch on if stock investors were able to determine if a CEO is fibbing about an earnings forecast. No one yet suggests that facial coding is anywhere near as reliable as a polygraph, but it could signal when a CEO says one thing while suppressing an emotion that says another.

So far on Wall Street such strategies have barely moved ahead of palm reading as an investment strategy. That might be changing. A paper called “The Face of Success” published in February’s issue of the journal Psychological Science found that students who looked at photographs of Fortune 1,000 CEOs were able to identify the most successful. They knew nothing about the executives before looking at the photos, but used naive judgments to rate them on traits such as competence, dominance, likability and trustworthiness, says co-author Nicholas Rule, a psychology professor at Tufts University.

Entire article here.