CEO Narcissism and Corporate Misconduct

Abstract

Narcissistic CEOs tend to act to preserve a favorable public image. We content that in their avoidance of behaviors that might harm their reputation as a great leader, a narcissistic CEO minimizes actions that cause corporate misconduct. Consistent with our hypothesis, we find empirical evidence that corporations with narcissistic CEOs have fewer violations and pay lower fines in penalties. When a non-narcissistic CEO is replaced with a narcissistic CEO, the number of corporate violations diminishes, but the converse occurs when a narcissistic CEO is replaced with a non-narcissistic CEO. The findings provide insight into the complex relationship between CEO personality attributes and corporate behavior.

Keywords: CEO behavior, Narcissism, Corporate Misconduct