A mining CEO's willingness to participate in risky investment opportunities significantly affects a company's strategic-investment decisions. Decision-analysis techniques provide a mechanism for measuring a CEO's risk tolerance and ability to make formal comparisons of risk propensity among mining firms. The authors developed a methodology for measuring CEO risk tolerance. The findings from a confidential survey of mining CEOs are presented. The results from the survey suggest that: · mining CEOs are overwhelmingly risk averse when considering investment decisions; · CEOs of small mining firms are significantly more risk averse than CEOs of large mining firms: and there appears to be some differences between Australian and non-Australian CEOs regarding their willingness to participate in risky investments.The results of this survey suggest that CEOs are pursuing objectives other than, or in addition to, maximizing shareholder wealth and that they act to reduce the financial exposure associated with strategic investments.
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