Military CEOs are found to perform better than their civilian counterparts, according to a study by Efraim Benmelech and Carola Frydman. The research, which involved 4,000 CEOs, revealed that military veterans are more likely to be appointed during times of corporate turbulence. These CEOs are also less prone to fraud and corporate policies associated with it.
Despite these positives, military CEOs are not associated with better company performance. The study showed no significant difference in the operational performance between firms led by military and non-military CEOs. However, military CEOs were found to be more conservative in their financial policies, opting for lower levels of leverage, less volatile earnings, and higher survival rates during industry downturns.
The study also found a decrease in the number of military CEOs from the 1980s onwards, correlating with the decline in military conscription in the United States. This trend suggests that the pool of potential military CEOs is shrinking, which could impact the future landscape of corporate leadership.
In summary, while military CEOs may not necessarily boost company performance, they do offer stability and integrity, particularly during challenging times. They also tend to be more financially conservative, which can contribute to company survival during industry downturns. However, the decreasing number of military CEOs could alter the dynamics of future corporate leadership.
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