Age, Gender, and Risk-Taking: Evidence from the S&P 1500 Executives and Market-Based Measures of Firm Risk

Abstract

This paper examines whether the age and gender of the firm’s top executives are reflected in firm-level riskiness. Using data on the S&P 1500 firms, we document that firms with older Chief Executive Officers (CEO) and Chief Financial Officers (CFO) are associated with less volatile stock returns and lower levels of idiosyncratic risk. This finding suggests that executives become more risk averse with age and may constrain risk-taking by their firms. Furthermore, we find evidence of a strong positive relationship between female executives and firm risk after controlling for firm-specific attributes and managerial risk-taking incentives. Overall, our empirical findings demonstrate that the age and gender of the firm’s top executives may have important implications for corporate outcomes.