June 10, 2013 Monday
CEOs Are Different from Us (and from CFOs)
Research Finding :
Just 9.8% of chief executives can be categorized as " risk-averse " , compared with 64% of the (similarly aged) general population,
Sample Size :
A survey of about 1,000 top leaders in the U.S. by John R. Graham, Campbell R. Harvey, and Manju Puri of Duke University . And 10,000 normal public , men and women, of similar age group . They administered a questionnaire.
Underlying reason : To push the growth of companies and to achieve business targets, CEO s are compelled to take some risky decisions that yield high pay-off s ! However, they need to involve other stake holders & match their gut feelings with hard data, well researched by M.R. Unlike CEO s, normal public do not have the benefit of plenty of advisers with specialized knowledge.
Corollary fact :
Moreover, 80% of CEOs are " very optimistic " , well above the mean. CEOs are also much more optimistic than CFOs; only 65% of CFOs can be classified as very optimistic.
Reason ?
CFO s have to exercise a lot of '' Due Deligence " which is basically a pessimistic activity of sizing up what can go wrong .
SOURCE: Managerial attitudes and corporate actions
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