A new study by Claremont McKenna professors has found its way onto The Motley Fool. Here's what the article says,
Recent research from professors at Ohio State University and Claremont-McKenna College looked at how CEOs handle their personal finances and found "a strong and robust positive relation between personal and corporate leverage."In other words, they found that CEOs with significant personal leverage -- in the form of ahefty mortgage -- tend to oversee companies with higher-than-average corporate leverage. And the link is even stronger with CEOs and companies that have weak corporate governance structures in place.
I don't know about you, but I find this stuff downright fascinating. I'm reading a book called, Good to Great, about how CEOs aren't necessarily visionaries, but that they represent how their company is doing. The thinking is, Steve Jobs is the epitome of Apple, and so he doesn't lead it, but direct it.
In any event, I wonder if you can tell the difference with how risky a school's portfolio is by looking at the terms of the mortgages of its endowment officers or its college presidents...
Hmm...
