Highlights – September 2013

CEOs need to demonstrate strong leadership and good decision-making skills, which makes them appear confident. However, according to a new study in the Journal of Financial and Quantitative Analysis, CEOs with over-confidence can involve their companies in riskier ventures and put investors' funds at risk.

For example, CEOs who are over-confident tend to target companies for acquisition that do not focus on their core line of business. Generally speaking, such mergers, which involve diversification, don't work.