Does A CEO's Personal Life Predict How They'd Run A Company?

richard branson

Photo: www.virgin.com

Risk-takers at home are risk-takers in the office.Via the New York Times:

research has shown that a top executive’s personality can have powerful effects on how a corporation is operated.

For example, Henrik Cronqvist, Anil K. Makhija and Scott E. Yonker found that the level of debt for a company was related to how much a chief executive was willing to borrow to buy a house. Matthew Cain and Stephen B. McKeon looked at chief executives who had pilot licenses.

Flying small planes is viewed as thrill-seeking behaviour. Professors Cain and McKeon found that chief executives with pilot licenses were more prone to engage in acquisitions, with the theory that takeovers are risky, yet exciting ventures.

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