Purpose: This study examines whether Chief Executive Officer (CEO) and Chief Financial Officer (CFO) characteristics relate to firm risk asymmetrically and identifies which attribute holds the most robust association.
Research Methodology: We analyze 372 firm-year observations of non-financial firms listed on the Indonesia Stock Exchange between 2022 and 2024. CEO financial education, CFO positional diversity, CFO stock ownership, and CFO gender are the variables of interest in this study. Idiosyncratic risk is regressed with firm and year fixed effects, with total volatility as a robustness check.
Results: CFO stock ownership is negatively related to both risk measures (p < 0.01), while CEO financial education is positively related to idiosyncratic risk alone. Female CFOs are associated with higher total volatility only, and CFO positional diversity remains insignificant.
Conclusions: Executive attributes have different empirical signatures. CFO equity exposure is associated with lower risk across all measures, whereas CEO financial education is associated with firm-specific risk alone.
Limitations: The design identifies conditional associations rather than causal effects, and the binary executive indicators draw identification from executive turnover within the firms.
Contributions: Whereas prior work examines CEO and CFO attributes in isolation, this study allows four characteristics to compete for explanatory power over firm risk in an emerging market, isolating CFO equity exposure as the most robust executive correlate. This extends the CEO versus CFO literature from financial policy to firm risk and positions CFO incentive design as a governance lever in its own right.