Mendoza School of Business

Flying bosses: New study highlights why CEO pilots make good leaders

Published: August 8, 2011 / Author: Shannon Chapla

The kind of
risk-seeking behavior that motivates certain people to fly personal aircraft
may also make them effective corporate leaders, according to a new study
co-authored by professors from the University of Notre Dame and the University
of Oregon.

Merging finance
and psychology research to explore the role that genetics plays in CEO
behavior, finance professors Matthew Cain of Notre Dame’s Mendoza College of
and Stephen McKeon from the University of Oregon’s
Lundquist College of Business document a persistent relation between genetic
personality characteristics of CEOs and the types of corporate policies adopted
by their firms in their study, “Cleared for Takeoff? CEO Personal Risk-Taking
and Corporate Policies.”

Firms led by
CEOs who are pilots exhibit corporate policies that differ substantially from
those led by non-pilots,” Cain says. “For example, CEO pilot-led firms are more
likely to engage in mergers and acquisitions, have more debt in their capital
structure – meaning higher leverage and greater overall stock return
volatility. Thus, thrill-seeking CEOs bring a certain element of this
personality trait into the executive suite, as reflected by more aggressive
corporate policies.”

Cain and McKeon
focused on small aircraft pilots. They were able to systematically determine
which CEOs like to fly airplanes by conducting searches on the Federal Aviation
Administration’s (FAA) airmen certification database, public records, and other
sources. “We identified 179 CEO pilots and more than 2,900 CEO non-pilots,”
Cain says.

Their research
was inspired by the Sensation Seeking Scale, originally developed by
psychologist Marvin Zuckerman in the 1970s and since used in hundreds of
psychology studies to measure the types of behaviors exhibited by sensation
seekers, including habitual drug use, sexual activity, psychopathy,
risk-taking, and cognitive innovation. One component of the scale, Thrill and
Adventure Seeking, is measured by survey responses that indicate a preference
for activities such as flying airplanes, surfing, skiing, sky-diving, scuba
diving, mountain climbing, and driving motorcycles.

“Piloting small
aircraft as a hobby is more risky than driving a motorcycle, flying a
helicopter, or even crop-dusting,” Cain says. “Thus, the research shows, these
CEOs exhibit a clear willingness to engage in risky activities for the sake of

So how well do
these firms perform? One might wonder if CEOs who possess a personality trait
that can be linked with psychopathy and criminal activity, as the Sensation
Seeking Scale indicates, would drive suboptimal firm performance. In fact, Cain
and McKeon found no such evidence of value destruction at the corporate level.

The research
shows many of the undesirable behaviors often exhibited by sensation seekers
tend to manifest among individuals who lack adequate stimulation and outlets
for creativity. Therefore, Cain and McKeon say running a large, public company
may serve as an outlet for creativity and help to draw out certain cognitive
abilities of CEOs to the benefit of their firms and ultimately shareholders.

“These CEOs
tend to complete acquisitions that are more successful than those completed by
non-sensation seeking CEOs,” Cain says. “Their creativity and novelty seeking
characteristics lead them into deals that improve the growth prospects of their

Contacts: Matthew Cain, 574-631-1492 or; Stephen McKeon, 765-413-4277 or


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