We might think our private lives are our business, but that isn’t the case with CEOs. For one thing, we’re fascinated by the lives of these powerful people and their lives are often public. For another, personal experiences (e.g., childhood trauma, being married or not, engaging in infidelity, having children or not, experiencing bereavement) can have effects on firm performance through the influence these life events have on CEOs’ mindsets. Two perspectives, stress theory and developmental psychology, suggest life events can cause disequilibrium in our lives that somehow needs rebalancing - something that’s no different for CEOs.
For the most part, the outcomes observed are the sorts of things you might expect, stabilising personal events for CEOs (e.g. marriage) lead to lower levels of corporate risk taking, and so on. A few things strike me as I read this, the first is that many of the research designs are unlikely to permit more than tentative suggestions of relationships; many of the experiences are out of the CEOs’ control (e.g. anything in childhood, anything bereavement related); and as a result, I’m unsure how actionable the findings are. Perhaps it’s enough that we can coach CEOs undergoing these life events to be aware of the impact it might have on their decision-making.
Source: https://www.sciencedirect.com/science/article/pii/S104898432300005X
