High-flying CEOs

In search of an aggressive, risk-taking corporate leader like Richard Branson? Head to the local airstrip.
Richard Branson, founder and chairman of Virgin Group Ltd., speaks during an interview at the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida, U.S., on Wednesday, Nov. 18, 2009. Virgin America Inc., the low-fare airline partly owned by Branson, probably will add new U.S. investors by the end of 2009, Chief Executive Officer David Cush said. Photographer: Charlotte Southern/Bloomberg via Getty Images *** Local Caption *** Richard Branson
High-flying CEOs
Charlotte Southern/Bloomberg/Getty Images

Richard Branson, the swashbuckling CEO of Virgin Group, once crossed the Atlantic Ocean on a speedboat. He’s crossed the Atlantic and Pacific by hot air balloon, too, and recently announced plans to explore the ocean’s deepest points in a custom-built submarine. Branson also likes to fly airplanes—something he apparently has in common with Larry Ellison of Oracle and Eric Schmidt of Google—which could say a lot about his management style. According to a new study, a CEO who enjoys the adrenalin rush of flying private planes is more likely to be a bold, risk-taking leader, and Branson seems to be a case in point: after all, he launched space tourism company Virgin Galactic, which calls itself the world’s first spaceline.

In the study, finance professors Stephen McKeon of the University of Oregon and Matthew Cain of the University of Notre Dame searched the Federal Aviation Administration’s certification database and other records; using this, they then compared 179 corporate executives who hold private pilots’ licences to 2,900 non-pilot CEOs. (Branson wasn’t included in the study, because it only looked at public companies.) Interestingly, none of the pilot CEOs they identified were women.

“The question is, does personal risk-taking outside the scope of the firm translate into corporate policy?” McKeon asks, and they concluded that the answer is yes. “It turns out pilot CEOs are more likely to make acquisitions in any given year,” he says, and are more likely to take on debt. Overall, pilot CEOs seem to be more aggressive in their corporate policies, and to be strong and effective leaders.

As for whether having a pilot for a CEO is always a good thing, though, McKeon isn’t so sure. “We didn’t find much evidence of it being bad,” he says, “but like any trait, I’m sure it runs the spectrum.” McKeon points to Dennis Kozlowski, the former CEO of Tyco—and a pilot—who was found guilty in 2005 of stealing hundreds of millions of dollars, and became a poster boy for white-collar crime. “He was clearly a risk taker,” McKeon says, “and that’s evidence of a bad outcome.”