The effects of CEO narcissism on corporate social responsibility and irresponsibility

Abstract

This study examines how chief executive officer (CEO) narcissism influences a firm's activities associated with corporate social responsibility or irresponsibility (CSR or CSIR, respectively). Employing upper echelons theory, the approach-avoidance motivation of narcissists, and the overinvestment hypothesis, we predict that CEO narcissism positively affects both CSR and CSIR. We also propose that these relationships are negatively moderated by corporate governance structure, captured by the ratio of outside directors and the ownership of institutional investors. Empirical results from a panel dataset of U.S. firms for the 2000-2012 period provide support for our hypotheses. Our finding establishes a better theoretical and practical understanding of how a CEO's psychological personality can change a firm's behavior with respect to its social responsibility.