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Investors Prefer Privately Educated CEOs

A study shows that investors view CEOs from private schools as safer, despite no evidence of better performance compared to state-educated peers.

Source:theguardian.com

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Standard — Natural English

72 words · ~1 min read
According to a study from the University of Surrey, investors consider CEOs who attended private schools to be a 'safer bet.' The research shows that while companies led by these CEOs have lower stock market volatility, there is no evidence that they perform better than those led by state-educated CEOs. This perception may stem from investors mistaking privilege for competence, highlighting a gap between how markets judge leaders and their actual performance.

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Test your understanding

Test your understanding

01What do investors think about CEOs who attended private schools?

02What was the average lower stock market volatility for firms led by privately educated CEOs?

03What do researchers suggest investors may be mistaking for competence?

04What does the study highlight about the relationship between CEO background and company performance?

Discussion

Discussion

What factors do you think influence investors' perceptions of CEOs?

Vocabulary

Vocabulary

  • CEO word

    Chief Executive Officer, the highest-ranking person in a company.

    “The CEO made an important decision for the company.”

  • investors word

    People or organizations that put money into a business expecting a profit.

    “Investors are interested in the company's future growth.”

  • volatility word

    The degree of variation in trading prices over time.

    “The stock's volatility worried many investors.”

  • perception word

    The way something is understood or interpreted.

    “Her perception of the situation was different from mine.”

  • competence word

    The ability to do something successfully or efficiently.

    “His competence in finance helped the company grow.”