The impact of chief executive officer narcissism on environmental, social, and governance reporting

Abstract

We analyze the effect of chief executive officer (CEO) narcissism on environmental, social, and governance (ESG) reporting. The study relies partly on hand‐collected, visual data and covers 57 German DAX 40 and MDAX companies from 2016 to 2020 (266 company‐year observations, Bloomberg database). Looking into the sub‐scores of ESG, CEO narcissism has a negative and linear relationship with environment and governance reporting but there is no significant relationship between narcissism and social reporting. Regression analyses further suggest a U‐shaped (quadratic) relation between CEO narcissism and ESG reporting: while low to moderate degrees of narcissism affect overall ESG reporting negatively, as CEO levels of narcissism increase so does the level of reporting. Moreover, further analysis has shown that the quantity of reporting is additionally positively related to ESG performance. The study applies and validates a relatively new but easily applicable measure of narcissism and extends narcissism research in the area of curvilinear relationships. We offer several further implications for human resource managers, regulators, auditors, and (non‐)financial analysts.

CEO Narcissism in Arab Equity Markets and Its Repercussions

“…Al., (2018) -; the study also relied on dividing the length and size of the signature into 4 parts so that (the first fourth is the lowest level of narcissism and takes (1), and the highest level of narcissism takes (4). This measure is consistent with many previous studies, including : Aabo et al, 2021;Donker et al, 2023;Ham et al, 2017;Ham et al, 2018;Ismail and Gad, 2000;Kind et al, 2023;Pal et al, 2011;Wang et al, 2022;Zweigenhaft, 1977.…”

Mapping the Landscape of ESG Strategies: A Bibliometric Review and Recommendations for Future Research

“…This is because European ESG initiatives mainly rely on programs implemented by external industry associations or companies, which diminishes the influence of executive officers in promoting voluntary ESG disclosure [113]. In their study, Kind et al [114] found that narcissism is negatively associated with reporting on governance and environmental factors. However, they found no significant relationship between social reporting and CEO narcissism.…”

Theories underlying environmental, social and governance (ESG) disclosure: a systematic review of accounting studies

“…This theory posits that an organization's success depends on the characteristics and decisions of its top management, and strategies reflect the experiences, knowledge, and visions of its leaders (Hambrick and Mason, 1984). For example, Kind et al (2023) relied on this theory to observe the effect of CEO narcissism on ESG disclosure. Also applying this theory, Ma et al (2020) argued that voluntary disclosure of CSR activities reflects the professional and ethical values and standards of their top executives.…”