Leadership for quick recovery: CEO tenure, risk-taking and corporate resilience

Purpose – When adversity hits, CEO’s leadership is determinant in interpreting, responding to and recovering from shocks. Yet, despite extensive research on corporate resilience across macro-, meso- and micro-levels, little is known about the individual-level drivers through which CEOs shape the firm’s ability to recover quickly. Building on upper echelons theory, we examine how CEO tenure functions as a double-edged sword, balancing accumulated experience against risks of rigidity, and whether CEOs’ risk-taking moderates this relationship. Design/methodology/approach – We draw on a panel of non-financial firms listed on Euronext Milan from 2013 to 2023. Corporate resilience is operationalized as the time needed to recover from episodes of financial distress, estimated through a Cox Proportional Hazards model. Findings – Our results reveal a U-shaped relationship between CEO tenure and corporate resilience in terms of time to recovery. Recovery time decreases, thus increasing corporate resilience, during the mid-phase of a CEO’s tenure when experiential learning and organizational knowledge are at their peak, thereby enhancing resilience. Additionally, CEO risk-taking negatively moderates this relationship: a higher risk propensity increases the likelihood that CEOs pursue rapid actions to overcome distress, further boosting resilience. Originality/value – By framing resilience as time to recovery, our study shows that CEO tenure and risk-taking orientation are key factors in corporate resilience, bridging two largely separate research domains: leadership studies and resilience research.