How CEOs Make Friends And Get Influenced

Article in the WSJ wondering whether “CEOs act similarly because they hang out together or do they hang out together because they act similarly?”

An analysis of HBS graduates conducted by Ms. Shue suggests peer influence among CEOs and CFOs has a profound effect. Executives show a greater tendency to acquire companies if that is what the other executives from their section have been doing. And compensation patterns are more similar among executives who were in the same section than for those who were not.

Ms. Shue also found that the similarities were strongest following the staggered reunions that HBS graduates attend every five years.

Apparently hearing friends boast of big mergers and fat paychecks isn’t easy for A-type executives to take.