We can all agree that we are at the cusp of a serious tech bubble explosion, largely due to the out-of-control artificial intelligence (AI) hype and nonsensical investments in data centres. I have certainly complained specifically about the driving forces behind this bubble, which include mostly what you may call the asset class (aka: shareholders, investors, venture capitalists, techbros, cryptobros, etc).

Well, it turns out that these investors may be mistaking privilege for competence, rewarding privately educated CEOs with lower perceived risk despite no evidence that they perform or behave differently.

In a new study from the University of Surrey, published in European Financial Management, researchers show that firms run by CEOs who attended private school create a perception with investors, interpreting elite backgrounds as a signal of competence and stability.

The study titled “Rich Dad Poor Dad? CEO Private School Background and Firm Risk,” researchers examine how a corporate leader’s secondary education shapes their management style and relationship with risk and found that firms led by privately educated CEOs had around 5% lower stock volatility on average. However, there was no evidence that these CEOs took fewer risks, delivered better results or handled crises more effectively than their peers.

Researchers analysed decades of data on US firms, using private school attendance as an indicator of individual CEOs’ socioeconomic background and compared stock market volatility, company performance and corporate decisions across firms led by privately and publicly educated executives.

Are we really surprised?

Throughout my career in the deeptech sector at the heart of London’s “Silicon Roundabout” since 2012, the tech sector has always branded itself as the ultimate meritocracy and the innovation frontier where raw talent, disruptive code, and engineering brilliance dictate success.

However, over time, I have come to realise that the reality of corporate decision-making paints a far more traditional picture. For example, we are witnessing massive waves of tech layoffs being frequently paired with erratic pivots toward half-baked AI strategies, executed by chief executives and VCs who have rarely written a line of code.

More concerningly, these same financial elites are routinely appointed to high-level state panels to advise governments on complex technical strategies, despite holding generalist humanities degrees, such as philosophy, history, or classics, rather than computer science or data science, just to name a few.

For the record, I am not berrating the above mentioned degrees. But, considering what is at stake with AI, philosophy ain’t your way in understanding the true realities of AI, good, bad or ugly.

And yet, the above research highlights a gap between how markets judge leaders and how those leaders actually behave. While it is often assumed that background shapes decision-making, the evidence suggests something more subtle, where investors may be relying on social cues when assessing uncertainty.

In other words, and I find this quite concerning, when uncertainty is high, investors appear more likely to fall back on signals such as secondary school education and upbringing to guide their judgment, not even higher education.

Dr Christos Mavrovitis, co-author of the study, Senior Lecturer in Finance and Accounting at the University of Surrey, said that people like to think markets are purely rational. However, their findings show that perception still plays a powerful role. “A CEO’s background can shape how investors feel about a company, even when it has no real impact on how that company is run,” said Mavrovitis.

The study highlights that in regions heavily stratified by elite private education, private high schools serve as institutional engines of class reproduction. They do not merely teach curriculum; they instil a profound sense of psychological entitlement, an unbreakable social safety net, and access to insular networks of capital.

Speaking from my experience, pitching around the tech venture capital community, institutional investing worlds operate within tightly closed loops. Large-scale decision-makers, asset managers, and corporate boards routinely protect and fund their own kind, peers who share identical educational backgrounds, elite private schooling, and past professional affiliations – as highlighted in Keswani et al. 2015 paper titled “Frenemies: How Do Financial Firms Vote on Their Own Kind?”

This insular loyalty distorts the allocation of capital. VCs fund founders who look and speak like them, institutional investors back companies run by fellow elites, and governments stock their advisory committees with individuals from the same narrow socio-economic pool.

No wonder that the vast majority of CEOs in the world of tech are white men, with women barely representing 2% of tech founders receiving VC funds. I have discussed this topic on The CEO Retort podcast with the great Cindy Gallop, founder of Make Love Not Porn and former chair of the US branch of ad agency Bartle Bogle Hegarty (BBH), and the brilliant Ida Tin, the mother of FemTech.

Perhaps the solution to our current economic dilemma and the AI clown show is to appoint people who are genuinely qualified to do the job in the relevant field – those who are real experts and visionaries, not just schoolboy buddies.