One pattern that emerged from Henderson and Hutton’s data was that firstborn and only children seemed to have better odds of becoming CEOs than latter-borns did: Nearly half of the CEOs they studied were the oldest sibling or an only child, which is, the researchers note, higher than this group’s share of the population born between 1920 and 1959, when most of these CEOs entered the world. (The CEOs were also overwhelmingly male and white.)
Other research has also found firstborns to have a professional edge: They’re more likely to hold managerial positions, and they tend to make more money. There’s some evidence that this has to do with household dynamics. “Firstborns are more likely to have college degrees, and even before that get lots of mom-and-dad time early on, which might make them more successful later,” Henderson said. “That explains why more firstborns are CEOs—they get a bigger investment in their human capital.”
Once hired, CEOs—firstborns or not—tend to run companies in ways consistent with their upbringing. Children with higher socioeconomic backgrounds have been shown to be more risk-averse, and indeed, Henderson and Hutton find that CEOs who grew up well-off seem to be more cautious executives, investing less money in higher-payoff corporate initiatives and spending less on research and development. Meanwhile, CEOs from less affluent backgrounds were more willing to take risks with company spending.
Researchers aren’t certain why this dynamic exists, but they have some guesses. “CEOs who grew up with successful parents may feel that they have access to winning formulas; therefore they may feel less need to alter their blueprint for success,” Sharna Olfman, a developmental psychologist at Point Park University, wrote to me in an email. “CEOs who are the first in their family to achieve significant economic success are by definition charting their own paths and do not have a surefire path to follow, freeing them up to be more original and creative in their approach.”
Henderson, who specializes in corporate and securities regulation, noted that from the perspective of maximizing a company’s value, making bigger gambles leads to higher payouts. “If what you’re interested in is stock returns, you want to take risks,” he said.
Socioeconomic background was the strongest determinant of executives’ risk-aversion that the researchers found, but it wasn’t the only one. “Trauma” is a catchall category the study used to refer to adverse events in CEOs’ childhoods, from the genuinely traumatic (having a serious illness or abusive parents) to the merely difficult and disorienting (moving to a new city). The former types of experiences were linked to more conservative corporate leadership, while the latter seemed to induce an amount of risk-taking that was good for the bottom line.