Manlier Business Leaders More Likely To Misreport Company Finances?

Plenty of evidence shows that higher testosterone makes us more competitive, and one area where this has helped some guys rise to the top is the cut throat world of big business.

Having success in business is all about risk and reward, and men’s extra T is thought to be the reason why they are more likely to take risks.  This theory is supported by a study linking the hormone profiles of company CEOs to rates of misreporting earnings.

The work, from a team at Tilburg University, compared the T levels of 1,136 CEOs against how often they had been caught bending the financial rules in the past.  Clearly getting samples from that many high powered people (particularly if it’s to check if they had ever cooked the books) is tricky, so face shape was used as a marker of hormone levels.

Wait, what?

It may sound weird, but being exposed to a lot of testosterone during puberty shapes a number of physical traits, including manly facial features.  In 2012 Stirrat and Perrett found a facial width-to-height ratio (fWHR) was a reasonably good way to tell how much T a person had.  So using high quality, measurable, front facing photos of the CEOs found on Google the team collected their readings.

Facial width-to-height ratio (fWHR): the distance between the cheekbones is the width and the distance between the upper lip and the highest point of the eyelids is the upper face height. fWHR is calculated as width divided by height.

CEOs fWHR was then matched against official times that their business had overstated financial data between the years of 1996 and 2010.

And the results?

CEOs with an above average fWHR – and in theory higher T – were 98% more likely to have misreported financial figures in the past than those with a below average ratio.  Business leaders with manlier faces were also found to be more prone to insider trading and were more commonly personally blamed by financial regulators for breaking the rules.

I don’t buy it.

Okay, so T levels calculated from a face ratio, worked out in a photos may not be the most clinical of clinical studies, but the connection between hormones and risk taking is solid.

A recent study looked into the effect of testosterone and cortisol levels on business students, during an investment experiment.  20 volunteers were given an fictional $500,000 and were asked to turn it into $1.5 by investing wisely over an imagined 20 year period.  Everyone involved successfully managed the task.  However when the students were asked to do it again, in completion with each other this time, those with higher T chose much riskier investments to get rich faster.

So, what can we take from all this?

We probably can’t trust a fWHR based study enough to automatically call bullshit on every wide faced, square jawed guy bragging about his finances.  Mind you, I don’t think anyone would blame if the next time you heard Quentin Tarantino talking about how much money his latest film made, you were just a little more suspicious than normal.

If nothing else this study adds to a growing understanding of how money affects testosterone and vice versa.

You shouldn’t worry that stronger testosterone will turn you into a reckless, scheming cheater either.  Higher T only gives you the energy and drive to succeed, it’s up to you how you use it.

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