Who Says You Need a Young CEO to Conquer the World?

When Warren Buffett stepped down as CEO of Berkshire Hathaway in 2025 at age 94, the business world rightly celebrated the preeminent guru of value investing. Yet observers had noticed something telling about his final years at the helm: Buffett had grown progressively more selective about where he deployed capital internationally, favouring businesses he understood intimately and markets where rules were clear. He avoided the culturally opaque or genuinely foreign.

Some acolytes called it wisdom. Others, however, saw it as a prime example of cognitive conservatism. They could point to a substantial body of empirical work that has linked CEO age to reduced international acquisitions, more conservative subsidiary ownership structures and a more cautious international footprint. The prevailing view is that aging multinational executives have shorter career horizons, which makes them risk-averse. Risk aversion leads to smaller bets on complex international ventures; ergo, older CEOs shrink their firms’ global ambitions. 

But risk aversion and cognitive decline may be only part of the story. Aging CEOs who pull back from a speculative cross-border acquisition may not be losing nerve — they may be exercising the pattern recognition to know which bets are genuinely speculative and which merely look that way. Or they may be rebalancing their firm’s global portfolio toward the parts they are best cognitively equipped to navigate. 

This more nuanced view of how CEO age shapes the international footprint of multinationals comes from a newly-published study. Drawing on data from 364 Japanese multinationals tracked over 16 years, the study’s findings challenge one of the most persistent assumptions in corporate governance: that aging at the top is a liability.

“As CEOs, they don’t simply pull back from global strategy, they recalibrate,” says Eddy Ng, Smith Professor of Equity and Inclusion at Smith School of Business. “CEO aging doesn’t mean less internationalization, it means ‘different’ ways to internationalize.”

The study was conducted by Ng with Liang Arthur Li of Ted Rogers School of Management, Anthony Goerzen of Smith School of Business and Elie Chrysostome of Ivey Business School.

The Japanese experience

Their focus on Japan was wise. It is the oldest society by population share, and the leaders of its major corporations reflect that reality. Japanese multinationals operate under a seniority-based governance tradition in which CEOs typically ascend to the top role only after long internal careers, often assuming leadership in their sixties. The average CEO age in the study’s sample was 68.

That demographic makeup, combined with Japan’s massive and sustained expansion of foreign investment, makes it an ideal laboratory. If aging leadership were simply correlated with strategic conservatism or withdrawal from global markets, it would be reflected in the data. Instead, despite an aging leadership class, foreign investment by Japanese firms grew more than fourfold between 2004 and 2020.

The researchers applied two important filters to their analysis. For one, unlike most studies in international strategy, they separated the cultural dimension of multinational decision-making from its institutional dimension. Entering a culturally alien market with no local precedent is a fundamentally different challenge from managing long-established subsidiaries in emerging economies where the regulatory terrain, however imperfect, is known. Lumping these together and measuring only whether a company is expanding or contracting internationally obscures more than reveals.

They also applied cognitive aging theory, which distinguishes between fluid and crystallized intelligence. Fluid intelligence is raw cognitive horsepower — the ability to process novel information quickly, reason through unfamiliar problems and adapt on the fly. It peaks in early adulthood and gradually declines. Crystallized intelligence is accumulated expertise: pattern recognition built from decades of experience, the intuition to navigate ambiguous situations and the confidence to make a call when the data is incomplete. It tends to grow across a lifetime. 

As the researchers point out, these two forms of intelligence are not equally useful in all situations. Different strategic environments call for different cognitive demands, which is just what their results revealed.

The researchers uncovered two patterns in the Japanese firms they studied. First, as CEOs aged within a company, their firms became progressively less likely to hold operations in countries that were culturally distant from Japan; these were places with different social norms, communication styles and business conventions. Navigating cultural distance demands exactly the kind of rapid, novel cognitive processing that declines with age. 

Second, older CEOs were more likely to steer their companies toward countries with weaker formal institutions. These are seemingly higher risk markets with unpredictable regulatory enforcement, political uncertainty and incomplete governance frameworks.

It may seem counterintuitive to view aging CEOs as more comfortable in such environments, but it does make sense. While weak institutions may be challenging, at least the rules are written down. The challenges are procedural and structural rather than tacit and cultural. An executive who has spent decades navigating government relations, managing political uncertainty and building institutional relationships in foreign markets has the necessary toolkit to operate in such environments.

To make sure they were on the right track, the researchers tested an alternative explanation: that these patterns simply reflected retiring CEOs becoming cautious near the end of their tenure. When they re-ran their analyses excluding observations within one, two and three years of a CEO’s retirement, the findings held. This was an effect of aging rather than legacy conservation.

Rethinking the aging CEO

Perhaps the most significant contribution of this research is its challenge to what the authors call the “unidimensional decline model” of CEO aging. This is the assumption, embedded in much governance thinking, that older leaders are simply less capable than younger ones. 

A more accurate framing acknowledges that what changes with age is not capability but profile, the researchers say. The strengths shift, as do the liabilities. The wisdom lies in aligning the cognitive profile of the person at the top with the cognitive demands of the terrain they are navigating. 

For corporate boards, the question is not whether an older CEO is an asset or a liability in the abstract, but whether the cognitive strengths they bring are well-matched to the strategic context they face. An aging CEO navigating complex cultural integration following an acquisition in an unfamiliar market may be genuinely disadvantaged — their declining fluid intelligence is precisely what that situation demands. The same executive managing an established portfolio of emerging-market subsidiaries, negotiating with governments, and building institutional relationships over years may be operating at their cognitive peak. 

The researchers opened their study report quoting Cicero, the Roman statesman and philosopher, who wrote 2,000 years ago: “Have you heard of an old man who forgot where he hid his treasure?” Its implication is not that old men are sharp. It is that what endures with age is not speed or novelty but knowledge of where to look — and what to avoid.