Friday, February 07, 2014

Do Military Veterans Make Better CEOs?

Efraim Benmelech and Carola Frydman have conducted some intriguing research regarding military veterans in the business world.   Three key findings emerge from their work.  First, CEOs who have served in the armed forces perform better than other CEOs in industries that are experiencing turbulence, distress, or decline.  Second, CEOs with military experience are more conservative in their investment behavior.  They are less likely to make bold, risky capital and R&D investments.  Finally, CEOs with military experience are much less likely to commit fraud.   

Based on those results, one might be eager to search for senior executives with experience in the armed forces.  However, the authors found a dramatic decline in the number of CEOs with military service.   According to Kellogg Insights, which featured these scholars' research, "Among large, publicly held firms, the proportion of CEOs with military service in their background has decreased by an order of magnitude since 1980—from 59% to only 6.2%."   In sum, military veterans appear to make good corporate leaders, but the competition to attract these top notch former soldiers has become much more intense. 

1 comment:

russconte said...

The original article that is linked in the first paragraph is very good, the research is solid, and the points are well supported. Thank you very much for bringing this to a wider audience.

A former US Secretary of Labor once said, The best thing we can do for returning veterans is give them a job - now we know that even the top role benefits from their experience. Very good find - again!

Source: http://www.elainelchao.com/editorials/view/give-a-returning-veteran-a-job