Engineers make the best CEOs

A recent paper published in The Review of Financial Economics  has found that engineers make better CEO. I am sure this is a good boost to your ego right about now, but I thought it would be good to explore this more. This will help better understand what it is to be an engineer and what career options you can consier moving forward.
Fist, the details about the article.
The article, Engineering leadership: A human capital, cognitive‑fit, and innovation diffusion perspective on CEO financial performance, was written by Ehsan Danesh and published earlier this year.  In it, the author examines Fortune 500 firms (2019–2024) and reports that companies led by engineering‑educated CEOs outperform peers on ROA, ROE and net‑income growth, with stronger effects when the CEO has deeper technical education from a second degree.
Why might that be?
In The Global Engineer I argue that three capabilities sit beneath good engineering: first‑principles reasoning, systems thinking, and framing. These aren’t confined to heat‑transfer, structures, or circuits; they transfer to organisation management just as well. They help you strip away noise, see interactions and constraints, and define the real problem before allocating effort. The kind of stuff senior leaders should do when planning what to do next.
It’s also a useful reminder of what a CEO is actually expected to do: set direction under uncertainty, allocate capital across competing options, manage risk explicitly rather than implicitly, and maintain the ability to course‑correct when the system pushes back. Engineers practice this every day: quantify assumptions, evaluate trade‑offs, and take deliberate risk where it is justified. This consistent with what the research found: the performance differences appear where disciplined analysis and adoption of better ways of working compound.
So, if you’re an engineer, take leadership seriously as a future path. You’ll still need to learn finance, governance, incentive design, and stakeholder work, but the underlying structure of your thinking already matches the job. For what it’s worth, I also have a business master’s; it taught me a lot, yet I frequently found my engineering skills providing an excellent base to process and use that knowledge.
Finally, for investors, leadership background is one sensible signal to evaluate a company. When a company appoints an engineer as CEO it’s reasonable to anticipate a different and better approach to problem framing, innovation adoption, and capital allocation. The study suggests those differences can show up in the numbers. So it’s a good indicator of when to buy.