Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies?

Photo : Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies?

Purpose This paper aims to examine the effect of two CEO characteristics, namely, narcissism and overconfidence on corporate social responsibility (CSR) and the moderating effect of corporate governance (CG) mechanisms in the UK.

Design/methodology/approach Using a sample of 2,360 UK firms listed on the FTSE 400 index for the years 2010–2017, the feasible generalized least squares method was applied to test the hypotheses developed. Findings The finding argues that CEO narcissism and overconfidence positively affect CSR.

In addition, this paper found that CG effectiveness moderates the CEO’s CSR behavior. Research limitations/implications This research is subjected to two limitations. First, this study used different measures to proxy for CEO narcissism and overconfidence. However, other measures are not included owing to the difficulty to collect data regarding these measures.

Second, this study includes only CSR performance instead of all other dimensions and categories of CSR. These limitations do not change the conclusions of this research, and they may provide guidance for further investigations. Practical implications Given that the CEOs psychological and behavioral features are critical in understanding CSR, shareholders and boards of directors should incorporate the behavioral aspects of narcissistic and overconfident CEOs in the design of CSR strategy.

Originality/value This study emphasizes the importance of top executives’ psychological characteristics for CSR, which is a key application and complements the “upper echelons theory” and fills the research gap in the literature. This is one of the few studies that investigate the interaction between CG, CEO profile and CSR.

Here, the research of Mouakhar Khaireddine.

Author(s)
  • Photo :

    Mouakhar Khaireddine Khaireddine Mouakhar is an Associate Professor of Strategy. He joined EM Normandie in 2013. He has a PhD in management science from the Université de Caen-Normandie, awarded in 2012. His thesis is on the influence of institutional pressure on the strategic behaviour of companies. His research interests include the strategic behaviour of companies, business models, dynamic capabilities, digital transformation and quantitative methods. Khaireddine Mouakhar is the Director of EM Normandie’s Caen campus. He also manages the school’s projects in the Middle East.

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