Unpacking the Nexus Between CEO Characteristics and Risk-Taking Behavior: A Systematic Literature Review Using the ADO Model

Nguyen Thanh  Lam

doi:10.54951/ijtar.v6i1.1013

Authors

Nguyen Thanh Lam Ho Chi Minh City University of Economics and Finance

DOI:

https://doi.org/10.54951/ijtar.v6i1.1013

Keywords:

Independent Auditors Opinion, Financial Factors, Corporate Governance, Audit Quality, Listed Company, HOSE

Abstract

This study systematically reviews empirical research on how CEO characteristics influence firm?level risk?taking behavior, applying the Antecedent–Decision–Outcome (ADO) framework to integrate and synthesize heterogeneous findings. Design/methodology/approach – Following PRISMA guidelines, we searched the Scopus database for peer?reviewed articles published between 2000 and 2024. From 1,230 initial records, 34 studies satisfied our inclusion criteria. Each article was coded for antecedents (demographics, professional experience, psychological traits, incentive structures, and structural roles), decisions (strategic risk?taking, financial policies, and operational actions), and outcomes (financial performance, risk metrics, and strategic results). Findings – The evidence demonstrates that a broad array of CEO traits—beyond basic demographics—significantly shape organizational risk?taking choices, which in turn drive firm performance and risk profiles. We identify underexplored antecedents (e.g. religious affiliation, overconfidence), reveal the importance of contextual moderators (governance mechanisms, industry and macroeconomic conditions), and highlight gaps in research on emerging and transitional economies. Originality/value – By explicitly framing the literature through an ADO lens, this review offers a unifying conceptual model that advances Upper Echelons and Behavioral Agency theories. It provides actionable insights for boards, compensation committees, and regulators, while charting a clear agenda for future mixed?methods and longitudinal studies

References

Aggarwal, S., Dsouza, S., Joshi, M., Antoun, R., & Phan, D. H. T. (2025). Environmental, social and governance investing: systematic literature review using ADO model. Journal of Accounting Literature. https://doi.org/10.1108/JAL-11-2024-0319

Amin, A., Ali, R., Ur Rehman, R., & Ntim, C. G. (2024). CEO personal characteristics and firms’ risk-taking behaviour: the moderating role of family ownership. Gender in Management, 39(2), 165–187. https://doi.org/10.1108/GM-02-2022-0034

Arulanandam, B. V., Selvan, C., & Goh, X. T. (2023). Critical factors influencing firms’ risk-taking behaviour: ceo characteristics and the moderating role of the audit committee. Central European Business Review, 12(5), 1–41. https://doi.org/10.18267/J.CEBR.337

Begley, T. M. (1995). Using founder status, age of firm, and company growth rate as the basis for distinguishing entrepreneurs from managers of smaller businesses. Journal of Business Venturing, 10(3), 249–263. https://doi.org/10.1016/0883-9026(94)00023-N

Busru, S. A., Shanmugasundaram, G., & Bhat, S. A. (2020). Corporate Governance an Imperative for Stakeholders Protection: Evidence from Risk Management of Indian Listed Firms. Business Perspectives and Research, 8(2), 89–116. https://doi.org/10.1177/2278533719886995

Chahyadi, C., Doan, T., & Naym, J. (2021). Hiring the right ceo: How does the type of ceo industry experience affect firm performance, firm risk-taking behavior, and ceo compensation? International Journal of Business and Society, 22(2), 828–845. https://doi.org/10.33736/ijbs.3762.2021

Dissanayake, S., Weerasinghe, A., & Dissanayake, D. (2025). Engineer CEOs and corporate risk taking. Journal of Accounting Literature, 47(5), 249–269. https://doi.org/10.1108/JAL-06-2024-0132

Faccio, M., Marchica, M.-T., & Mura, R. (2016). CEO gender, corporate risk-taking, and the efficiency of capital allocation. Journal of Corporate Finance, 39, 193–209.

Hambrick, D. C. (2007). Upper echelons theory: An update. In Academy of management review (Vol. 32, Issue 2, pp. 334–343). Academy of Management Briarcliff Manor, NY 10510.

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.

Herrmann, P., & Datta, D. K. (2002). Characteristics and t he Choice o f Foreign Market Entry Mode: An Empirical Study. www.jstor.org

Huang, Y. C., Chin, Y. C., & Lee, C. Y. (2022). Which executive characteristics influence risk-taking behaviours: evidence from Taiwanese companies. Asia Pacific Business Review, 28(4), 579–605. https://doi.org/10.1080/13602381.2021.1917159

Kraiczy, N. D., Hack, A., & Kellermanns, F. W. (2015). What makes a family firm innovative? CEO risk-taking propensity and the organizational context of family firms. Journal of Product Innovation Management, 32(3), 334–348. https://doi.org/10.1111/jpim.12203

Lee, W. S., & Moon, J. (2016). Determinants of CEO strategic risk-taking in the airline industry. Tourism Management Perspectives, 18, 111–117. https://doi.org/10.1016/j.tmp.2016.01.009

Lok, C. L., Hooy, C. W., & Chuah, S. F. (2024). CEO characteristics and IR4.0 adoption. Journal of General Management. https://doi.org/10.1177/03063070241263645

Nguyen, D. D., Nguyen, L., & Sila, V. (2019). Does Corporate Culture Affect Bank Risk-Taking? Evidence from Loan-Level Data. British Journal of Management, 30(1), 106–133. https://doi.org/10.1111/1467-8551.12300

Oh, H., Bae, J., Currim, I. S., Lim, J., & Zhang, Y. (2020). Influence of CEOs’ religious affiliations on firms’ advertising spending and shareholder value. European Journal of Marketing, 55(5), 1440–1468. https://doi.org/10.1108/EJM-01-2019-0024

Pretorius, M., & Maritz, R. (2011). Strategy making: The approach matters. Journal of Business Strategy, 32(4), 25–31. https://doi.org/10.1108/02756661111150945

Salehi, M., Arianpoor, A., & Naghshbandi, N. (2022). The relationship between managerial attributes and firm risk-taking. TQM Journal, 34(4), 728–748. https://doi.org/10.1108/TQM-10-2020-0246

Seo, K., & Sharma, A. (2018). CEO Overconfidence and the Effects of Equity-Based Compensation on Strategic Risk-Taking in the U.S. Restaurant Industry. Journal of Hospitality and Tourism Research, 42(2), 224–259. https://doi.org/10.1177/1096348014561026

Stetsyuk, I., Altintig, A., Arin, K. P., & Kim, M. S. (2024). CEO Characteristics and Risk-Taking under Economic Policy Uncertainty. Journal of Risk and Financial Management, 17(6). https://doi.org/10.3390/jrfm17060238

Tran, N. T., Pham, T. N. D., Nguyen, D. D., Tran, T. K., Phan, G. Q., & Nguyen, T. T. H. (2024). The link between firm risk-taking and CEO power of listed firms on the Vietnamese stock market: the role of state ownership. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2024.2302193

Tversky, A., & Kahneman, D. (1992). Advances in Prospect Theory: Cumulative Representation of Uncertainty. In Journal of Risk and Uncertainty (Vol. 5).

Wang, S., & Cheung, W. (2004). E-business adoption by travel agencies: Prime candidates for mobile e-business. International Journal of Electronic Commerce, 8(3), 43–63. https://doi.org/10.1080/10864415.2004.11044298

Wei, D., Luo, C., & Lu, J. (2025). CEOs With a Financial Background and Corporate Risk-Taking. Journal of International Financial Management and Accounting. https://doi.org/10.1111/jifm.12226

Yu, Y., Lee, Y. T., & Fok, R. C. W. (2021). The determinants of high-interest entrusted loans in China. Journal of Business Finance and Accounting, 48(1–2), 405–430. https://doi.org/10.1111/jbfa.12474

Zhang, Y., Cao, C., Gu, J., & Garg, H. (2023). The Impact of Top Management Team Characteristics on the Risk Taking of Chinese Private Construction Enterprises. Systems, 11(2). https://doi.org/10.3390/systems11020067

Zia-Ul-Haq, H. M., & Ameer, S. (2021). The influence of CEO characteristics on firm risk-taking: Evidence from UK SMEs. Estudios de Economia Aplicada, 39(8). https://doi.org/10.25115/EEA.V39I8.4509