Non-Executive Board Members More Risk Averse than Executives

When it comes to investment, CEOs are perceived to be the most risk tolerant, followed by CFOs and non-executives. However, recent research, measuring risk perception and return demands, shows that CEOs and CFOs are more aligned than previously thought, while non-executives are consistently riskaverse. CEOs will perceive more risk in an investment than CFOs, but don’t act on this perception: they don’t demand a higher minimum return on the investment, contrary to the minimum requirements demanded by non-executives.