Can life experiences and behaviors predict if someone is predisposed to risk-taking as a corporate executive? A pair of studies by University of Oregon professors in the Lundquist College of Business addressing this question were recently featured in an article for Bloomberg Businessweek titled, “The Most Daring CEOs Were Forged in Fire (and Flood, and Earthquake).”
Vineet Bhagwat, assistant professor of finance, was the co-author of the study that was featured in the article. Along with Gennaro Bernile and P. Raghavendra Rau, Bhagwat’s study, “What doesn’t kill you will only make you more risk-loving: Early-life disasters and CEO behavior,” detailed the affect catastrophes had on the risk-taking behavior of CEOs at companies in the S&P 1500. The study determined that a CEO's exposure to a disaster – tornado, mud slide, etc. – between the ages of 5-15 did have an effect on their behavior as executives. Those who had experienced moderate disasters were more likely to make riskier moves as CEOs later in life.
Included in the Businessweek article was a link to a study from 2011 by assistant professor of finance Stephen McKeon, titled “Cleared for Takeoff? CEO personal risk-taking and corporate policies.” The study, which will appear in a forthcoming issue of the Journal of Financial and Quantitative Analysis, was co-authored with Matthew Cain and determined that CEOs who flew small aircraft were more predisposed to risk-taking than those did not.
- by Melissa Foley, Office of Public Affairs Communications