Accounting and Finance Seminars: Professor Gonul Colak
Professor Gonul Colak (Hanken School of Economics, Finland)
G.15, 15-19 Tyndalls Park Road
Title: CEO Mobility and Corporate Policy Risk
Career concerns can limit a manager’s willingness to take risk, which can lead to excessively conservative decision making. An increase in CEO’s ability and willingness to change jobs (CEO mobility) can diversify her human capital and reduce her policy conservatism. We propose several CEO mobility measures and relate them to a policy riskiness index that captures overall risk embedded in a firm’s corporate policies. We find a strong positive relation between CEO mobility and riskiness of corporate policies. Mobile CEOs seem to take risks primarily through investment and business diversification policies, and to a lesser extent through capital structure polices. We also find CEO mobility to have a positive effect on shareholder value.