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Are CEOs Different? Characteristics of Top Managers

54 Pages Posted: 15 Mar 2016 Last revised: 10 Aug 2017

Steven N. Kaplan

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Morten Sorensen

Copenhagen Business School; Columbia Business School; Centre for Economic Policy Research (CEPR)

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Date Written: August 1, 2017

Abstract

We use a dataset of over 2,600 executive assessments to study thirty individual characteristics of candidates for top executive positions – CEO, CFO, COO and others. We classify the thirty candidate characteristics with four primary factors: general ability, execution vs. interpersonal, charisma vs. analytic, and strategic vs. managerial details. CEO candidates tend to score higher on these factors; CFO candidates score lower. Conditional on being a candidate, executives with greater interpersonal skills are more likely to be hired, suggesting that such skills are important in the selection process. Scores on the four factors also predict future career progression. Non-CEO candidates who score higher on the four factors are subsequently more likely to become CEOs. The patterns are qualitatively similar for public, private equity and venture capital owned companies. We do not find economically large differences in the four factors for men and women. Women, however, are subsequently less likely to become CEOs, holding the four factors constant.

Keywords: CEOs, CFOs, COOs, Managerial Characteristics, Hiring Decisions, Corporate Governance

JEL Classification: G30, J23, J24, M12, M51

Suggested Citation

Kaplan, Steven N. and Sorensen, Morten, Are CEOs Different? Characteristics of Top Managers (August 1, 2017). Columbia Business School Research Paper No. 16-27; Paris December 2016 Finance Meeting EUROFIDAI - AFFI. Available at SSRN: https://ssrn.com/abstract=2747691

Steven Neil Kaplan

University of Chicago - Booth School of Business ( email )

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National Bureau of Economic Research (NBER)

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Morten Sørensen (Contact Author)

Copenhagen Business School ( email )

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Denmark

Columbia Business School ( email )

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New York, NY 10027
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Centre for Economic Policy Research (CEPR) ( email )

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London, EC1V 3PZ
United Kingdom

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