Mediating Role of Financial Risk Aversion on the Relationship between Personality Characteristics of Senior Managers and Corporate Financial Distress with Futures Research Approach

Recognizing and analyzing the factors affecting the financial distress of companies and preventing its occurrence is one of the important issues in the economic and financial field. The personality characteristics of senior managers and their behavioral errors such as financial risk aversion as a component affect the financial decisions of managers and consequently the success and failure of companies in the field of competition.

The purpose of this study is to investigate the effect of personality characteristics of senior managers on financial distress of companies with emphasis on the role of financial risk aversion.

The research method in terms of purpose in the group of exploratory research, in terms of data collection in the category of qualitative research and in terms of results is also in the category of developmental research. The statistical sample of this research consists of 181 senior managers of manufacturing companies listed on the Tehran Stock Exchange. PLS2 Smart software was used to analyze the data obtained from the questionnaire.

The results show that senior managers with personality charactristics of openness to experience, adaptability and conscientiousness, reduce their risk aversion and reduce the financial distress of companies and extraverted senior executives increase their risk aversion and increase the financial distress of companies.