Mendoza School of Business

Study: Pilots Make Good CEOs

Published: August 9, 2011 / Author: Mendoza College

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.

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
Business 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.”

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

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.

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.

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

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.

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

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 firms.”

This story also appeared in General Aviation News.


Topics: Mendoza