Do Single CEOs Take More Risks? Are Married CEOs More Stable?

Amber Johnson Leadership

Here’s something new to consider when deciding where to invest your stock market dollars: you may want to look for companies headed by a married CEO.


New research conducted by University of Pennsylvania’s Wharton School of Business, on behalf of the National Bureau of Economic Research, shows that single CEOs are more willing to take risks with the company’s fortunes, leading to a less stable stock price. The study looked at 1500 companies, about 20% of which were headed by single executives. 


“The companies with an unmarried CEO tended to spend more money on things like R&D, acquisitions and other investments that could more rapidly increase the size of their businesses, but also had a higher chance of blowing up. The result was a more volatile stock price,” says coverage from Fortune/CNN. 



Researchers are unclear why unmarried CEOs take more risks, but speculate it may have to do with the impulse to attract romantic partners: 

Co-authors Nikolai Roussanov and Pavel Savor argue that it has to do with dating. Single individuals will take on more risk to increase “spouse quality.” Says Roussanov, “Even among CEOs, relative position seems to matter in the marriage market.” Roussanov says it is possible that people who chose to be single are just risk-takers by nature, but he doesn’t think that is the answer. Nor did he think his results were skewed by the fact that technology companies tend to make more R&D investments and have younger CEOs. He said the results he found where the same across industries and the same no matter where the CEO lived, despite different divorce laws which could make marriage, if you are trying to protect your wealth, a riskier proposition. 

Since the majority of CEOs are married, it’s impossible to draw the conclusion that marriage alone makes an executive – and therefore a company – more stable. The research is silent on this topic, but I suspect there may be a corporate advantage to hiring an executive who is in a long-term, stable relationship: find someone who has celebrated more than a few anniversaries, and you may have found someone who knows how to work toward compromise, make decisions with long-term commitments in mind, and maintain the work/life balance that improves mental and physical health. Jim Collins, in his seminal book Good to Great, suggests as much, noting that the majority of the “great” companies were headed by executives in long term marriages. 


But is risk all bad? No risk, no reward, we’ve been taught. And certainly single CEOs like Tony Hsieh of Zappos have shown that unconventional decision making can pay off. He sold Zappos to Amazon for a reported $1.2 billion. 

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Amber Johnson is the Center for Values-Driven Leadership‘s corporate relations and social media advisor. She is a non-profit and small business communications professional. For more on this research study, visit Amber’s personal blog.