Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies? The moderating role of corporate governance

Abstract

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.

Effects of CEO Overseas Experience on Corporate Social Responsibility: Evidence from Chinese Manufacturing Listed Companies

“…However, CSR is an essential component of corporate strategic decision making, and CEO background characteristics will inevitably have a significant impact on CSR fulfillment. In this context, existing studies focus on the CEO's characteristics, identity, and organizationalrelated attributes: first, the relationship between individual characteristics and CSR, mainly including factors such as the CEO's moral leadership [19][20][21], transformational leadership [22], gender [23], education level [24,25], ability [26], overconfidence [27], narcissism and hubris [28][29][30][31], responsible leadership styles [32], entrepreneurial orientation [33], greed [34], luck [35]; second, the relationship between individual identity and CSR, including the CEO's power [36][37][38], family CEO [39], ownership [40], celebrity status [41], political ideologies [42], and the transgenerational transfer of entrepreneur's political appointments or identity [43]; third, the relationship between organization-related attributes and CSR, including the CEO's compensation [44,45], tenure [46,47], career horizon problems [48], duality [49][50][51], incentive mechanism [52,53], internal debt [54,55].…”

Do women on corporate boardrooms have an impact on tax avoidance? The mediating role of corporate social responsibility

“…Third, the current research focused on French companies. A huge stream of research has investigated relationships between corporate governance and CSR (Bouzouitina et al , 2021; Kachouri et al , 2020; Salhi et al , 2019; Jarboui et al , 2020) and between corporate governance and tax avoidance (Riguen et al , 2020; Riguen et al , 2021; Salhi et al , 2020; Wahab and Holland, 2012) in UK context. Although, very few studies have examined associations between those concepts in the French context.…”

Managerial overconfidence: promoter of or obstacle to organizational resilience?

“…This discrepancy can disturb the basis of trust with stakeholders and thereby can exert a negative impact on social resources. However, more recent publications indicate a positive effect of managerial overconfidence on CSR activities (Bouzouitina et al 2021;Dick et al 2021;Lee 2021). Moreover, as indicated by Arena et al (2018), managerial overconfidence might foster environmentally innovations, which in turn positively affect material resources through e.g., generating earnings.…”

“…Yet, in contrast to these detrimental effects, for mainly mid-sized, unlisted, founder-controlled family firms in Poland Dick et al (2021) observe a positive effect of managerial overconfidence on these firms' CSR activities. Moreover, according to Bouzouitina et al (2021) managerial overconfidence exerts a positive effect on British firms' CSR and Lee (2021) finds a positive relation between managerial overconfidence and the voluntary disclosure of greenhouse gas. Finally, Arena et al (2018) show that hubris (operationalized as overconfidence) is positively associated with environmentally friendly innovations.…”

“…Period : 1984-1994, sample: companies listed in the USA, which were listed in the Forbes 500 list at least 4 times during the period, 477 companies, the sample is based on the sample in Tate (2005, 2008) Three option-based measures Bouzouitina et al (2021) Relation between managerial overconfidence and corporate social responsibility…”