CEO business education and firm financial performance: a case for humility rather than hubris

Abstract

PurposeThe purpose of this paper is to examine the relationship between CEO business education and firm financial performance.Design/methodology/approachAn analysis of the relationship between three‐year and five‐year shareholder return as measured by dividend and change in share price and CEO educational qualification was performed.FindingsNo relationship was found between CEO MBA, business, or other qualification and firm financial performance.Research limitations/implicationsMore research, particularly in the form of multinational longitudinal studies, should be undertaken on the relationship between CEO business and other qualifications and objective outcomes. A limitation of this study is that it was undertaken in one country and measured only firm financial performance.Practical implicationsIt is possible that business education has been over‐emphasized as a prerequisite to successful management practice. It is also possible that the kind of management education that students have received is no longer appropriate to leadership at CEO level.Originality/valueAlthough many have blamed the GFC on business schools, there has been no examination of the relationship between CEO qualifications and firm financial performance in Australia, and little elsewhere. This study therefore fills a research gap.