Abstract
Firm-level risk has been shown by research to be impacted by off-the-job characteristics and one prominent theme has been family and relatives to members of the top management teams, such as founders and CEOs. TMT members coordinate and execute the firm’s risk across divisions or functions by following the direction and instructions of the company CEO/founder. For this reason, a growing literature in corporate finance points to the central role of CEO's traits in firm financial behaviour. In light of this we in this study, explore how firm risk-taking changes when the CEO enters parenthood. In doing so, we also explore differences in CEO child gender for firm risk-taking. We hypothesise that firm risk-taking is reduced for CEOs entering parenthood, but this is further reduced in the case of parenting a daughter compared to a son. To investigate our hypotheses we constructed a dataset using the Danish integrated Database for Labour Market Research in combination with information collected on firm-specific financial performance. Our final database consists of 419,633 CEO-year observations in the period from 2002 to 2016.