While the traditional picture of a chief executive is of a stoic, conservative deliberator, new research suggests that companies are better off with a high-flying risk taker—literally.
Researchers
compared 179 CEOs who hold private pilot's licenses with 2,000 nonpilot
CEOs. Psychological literature links the desire to fly with a genetic
personality trait known as sensation seeking, associated with heightened
risk-taking behavior. The comparison uncovered a consistent theme:
Chief executives with a penchant for personal risk-taking are also
corporate risk-takers who take on more debt, aggressively pursue mergers
and acquisitions, and make bold equity plays. But, in general, they are
also more effective leaders who create more value in their
organizations than their less risk-loving counterparts. And they do so,
the researchers add, without additional incentives; they imprint their
risk-loving natures on their companies because it's simply who they are.
"Cleared for Takeoff? CEO Personal Risk-Taking and
Corporate Policies," Matthew D. Cain and Stephen B. McKeon, Social
Science Research Network (May 1)
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