Privately educated CEOs seen as ‘safer bet’ by investors, study finds
Summary
A study from the University of Surrey found that investors see chief executives who went to private schools as safer leaders, even though these CEOs perform no better or take fewer risks than those educated in state schools. This perception leads to lower stock price changes for companies led by privately educated bosses, but the effect lessens as more information about the CEO becomes available.Key Facts
- CEOs with private school backgrounds are seen by investors as less risky.
- Companies run by privately educated CEOs experience about 5% less stock market volatility.
- There is no evidence that privately educated CEOs perform better or manage crises more effectively.
- Investors may confuse social status with business competence under uncertainty.
- The study analyzed data from US companies comparing CEOs’ education backgrounds.
- The perception effect decreases over time and with more informed investors.
- Research from the UK shows a high number of top business leaders attended private schools compared to the general population.
- Only about a third of FTSE 100 CEOs in the UK attended state comprehensive schools, while nearly 40% attended private schools.
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