From junk bonds to Enron to reckless subprime lending, every few years brings a new scandal and renewed hand-wringing over the decay in business ethics. This is naturally followed by proposed solutions—tighter regulation, harsher punishments for wrongdoing, perhaps even a Hippocratic Oath for MBA students.

Maybe business schools should think about sending their students to boot camp instead. A study of CEOs who have served in the military finds that companies run by former soldiers are less likely to commit fraud than CEOs who never served. But honesty may come at a cost to shareholders—the same study finds that military CEOs also produce lower returns at the companies they manage.

The study, by Efraim Benmelech of Harvard and Carola Frydman of Boston University, is the most recent in a string of studies that emphasize the critical role of CEOs in determining their companies’ fates. Leaders bring their own style of management to the companies they lead: “Chainsaw” Al Dunlap (also known as “Rambo in Pinstripes”), for example, was a notorious downsizer and cost-cutter, laying off thousands in the name of “streamlining” as leader of Scott Paper and later Sunbeam. Others are serial acquirers, like Sandy Weill, who used his companies to vacuum up smaller ones, building massive corporate conglomerates in the process. In two decades as CEO of the financial services behemoth Shearson, Weill expanded his empire by bringing 15 other firms under his control.

Benmelech and Frydman ask whether there are commonalities between companies run by CEOs who spent time in the military before starting careers in business. Are military types free-spending or frugal? Empire builders or downsizers? And do they direct their companies with a stronger sense of right and wrong than civilian executives?

To analyze how military experience translates into corporate leadership, the researchers looked up the names of CEOs that ran America’s top companies from 1980 to 2006 and matched them to their listings in various editions of “Who’s Who,” which explicitly requests military background in its annual biographical list of prominent Americans. The percentage of CEOs during this period with military experience—about 30 percent overall—may be surprising to those raised in the post-Vietnam era, who imagine a tiny fraction of 18-year-olds joining the armed forces. But military drafts meant that a stint in the military was quite common for men coming of age during World War II and the Korean and Vietnam Wars. Back in the 1980s, when many war veterans were about the right age to be running companies, nearly 60 percent of CEOs had military experience. Nowadays, with veterans of these wars entering their golden years, only 8 percent of CEOs have served. So whatever characterizes military leadership, it’s increasingly rare in the corner office.

This may be cause for concern. Business leaders with military experience seem to have in common a far greater level of honesty than CEOs who never wore the uniform. The researchers matched their CEO database to records of 132 cases of corporate fraud that took place during 1994-2004 to see who was in charge when accounting deceptions occurred. Military CEOs were about 60 percent less likely than nonmilitary leaders to preside over Enron-style cooking of the books—the rate of “fraud years” was under 1 percent for military CEOs, as compared to more than 2 percent on average for their civilian counterparts. Furthermore, military CEOs were less likely to doctor earnings numbers when the pressure is greatest, during periods of low industry profitability. In these low profit years, the average rate of fraud rises to just over 1 percent for military CEOs, as compared to nearly 5 percent for civilian ones.

Indeed, companies run by military CEOs seem to cope differently with hard times in general. Looking at a wider set of companies, and across the entire span of 1980-2006, Benmelech and Frydman find that firms run by ex-military CEOs perform much better under harsh economic conditions relative to the companies’ performance in good times. One interpretation is that once you’ve spent time managing a platoon (possibly under enemy fire), the stress of managing a company in a downturn is modest by comparison.

The data, though, suggest that while military CEOs do relatively well during bad times, their companies underperform during industry booms—well below the levels of their civilian-led counterparts. Once you account for both effects, shareholder value is a bit lower overall under military leadership.

The military trains recruits to be conservative rule-followers, not innovators, and this may account for the stability military CEOs bring to their companies. After accounting for individual attributes like age and place of birth, as well as company characteristics such as industry and size, military CEOs spend about 15 to 20 percent less on R&D and spend less on investment generally, relative to nonmilitary CEOs. This may make them less vulnerable to slack demand and the pressures of rising costs, but also means they’re less prepared to take advantage when opportunity knocks.

The study’s authors focus on presenting the facts about military management styles, and stop short of drawing out the implications of their analysis. Yet their findings do raise some troubling possibilities about what it might take to keep rogue executives in check. Indoctrinating future business leaders to always follow the rules may ensure that laws don’t get broken but also prevent them from looking beyond the way things have always been done. And if creativity requires a bit of a roguish streak, it could mean that the occasional scam might be necessary collateral damage in an innovation-driven economy. After all, innovation and creativity can sometimes be hard to distinguish from the financial illusions created by persuasive conmen. Before Enron’s great unraveling, it was revered as a model of the future of the energy business and the subject of a glowing Harvard Business School case study now airbrushed from history. And great ideas sometimes require taking a leap of faith: When eBay’s first president, Jeff Skoll, explained the business model to one of his Stanford professors, the professor was certain Skoll would be looking for another job in a few months, as eBay was one of the stupidest business ideas he’d ever heard.

Could we train future CEOs to possess military-style ethics, without asking them to enlist? If so, business schools haven’t figured out how to do it yet—Benmelech and Frydman’s study found that holding an MBA had a negligible impact on the likelihood that a CEO presided over fraud. As disconcerting as it may sound, American businesses may be better off as a result.