Monday, November 23, 2015

Are CEOs Smarter Than the Rest of Us?

Renee Adams, Matti Keloharju, and Samuli Knupfer have written a new working paper that attempts to examine the role of intellectual ability in reaching the executive suite. The scholars studied one million men in Sweden who served in the military over several decades. They had access to aptitude test results from the military for these men.   These tests measured inductive reasoning, technical comprehension, spatial ability, and verbal comprehension.  The CEOs were smarter than the average person. People who became CEOs of large companies in Sweden scored in the top 17% on these aptitude tests. However, they were not significantly "smarter" than many other professionals such as doctors, lawyers, and the like. Amazingly they find that CEOs in their sample tended to be taller than the others who had served in the military with them.   Height matters... what does that say about how we select our leaders?  Interestingly, past studies have found that American Presidents have tended to be taller than the average American citizen.   The scholars summarize their findings as follows:

There are more than 100 times as many men in managerial roles in the corporate sector who have better trait combinations than the median large-company CEO and who do not become a large company CEO during our 7-year sample period. Being born with a favorable mix of traits may be necessary but is far from a sufficient condition for making it to the executive suite.

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