“CEO Career Variety and Firm Risk Management Capabilities” by Dr. Philipp Meyer-Doyle
Management and Strategy Seminar
Dr. Philipp Meyer-Doyle
Assistant Professor of Strategy
INSEAD – Singapore
We explore how the prior career variety of a CEO shapes the CEO’s capacity to successfully manage risk. Making use of microdata on CEOs and firms, we find that CEOs with a greater career variety, in terms of the number of industries, firms, and functional positions they have worked in, achieve a lower variability of firm performance and a higher firm performance, both adjusted for risk taking; they also engage in greater levels of risk taking. Interestingly, these results weaken with longer CEO tenure in the firm. Taken together, these results suggest that CEO career variety is an important factor contributing to a CEO’s capacity to manage risk in firms. Overall, we contribute to the literatures on strategic leadership and on risk in strategic management.