The dark and bright sides of hubris: Conceptual implications for leadership and governance research

Abstract

Hubris among corporate leaders has recently gained much academic attention, with strategy and corporate governance research focusing mainly on negative aspects, such as overreach by strategic leaders during acquisitions. However, adjacent disciplines including entrepreneurship and innovation identify positive consequences too. How comparable are these findings? Appraising the conceptual and methodological approaches, we find that while the hubris concept has many strengths, several challenges remain. We suggest conceptual and empirical research directions aimed at increasing construct clarity, validating the hubris construct and extending the scope of hubris research. We also propose that research with boards and top management teams can help clarify how they make decisions to cope with the 'dark side' of hubris without suppressing 'bright side' outcomes.

Differentiating leader hubris and narcissism on the basis of power

“…Further, hubris and narcissism can coexist, although the precise nature of their interrelationship or co-occurrence has not yet been determined, but anecdotal evidence points to co-occurrence of hubristic and narcissistic leadership (Sadler-Smith, 2019a). Seven of 14 defining symptoms of HS are shared with NPD, five are unique, and the remainder are shared with other personality disorders (Owen and Davidson, 2009; Zeitoun et al., 2019). HS and NPD share a psychiatric classification of exaggerated sense of oneself and overconfidence, and they each have unique criteria that distinguish them.…”

“…Thus, they make excessively high bids for target firms and subsequently incur losses (Aktas et al., 2009; Roll, 1986). An example of when disastrous results exposed misuse of power of a hubristic CEO is Royal Bank of Scotland under its former CEO, Fred Goodwin, who purchased Dutch bank ABN Amro for an immensely inflated figure of £49 billion (Collinson, 2012; Zeitoun et al., 2019). The purchase was a contributory factor in RBS’s failure during the 2008 crash and subsequent bailing-out by U.K. taxpayers at an estimated cost of £45.5 billion.…”

“…confidence), which places it firmly on the dark and destructive side of leadership (Tourish, 2019). Only recently was it dichotomised into positive versus negative types, or as having dark and bright sides (Zeitoun et al., 2019). More empirical evidence is, therefore, needed to identify situations where leader’s hubris can lead to beneficial outcomes.…”

The Influence of CEO Hubris on Firm Performance in Indonesia: The Moderating Effects of CEO Power and Board Vigilance

“…The positive view makes the argument that a dominant and powerful CEO is predominantly a hero, or a savior, who is key to the firm's success (Koo and Park, 2018;H. Park and Yoo, 2017;Zeitoun et al, 2019). In contrast, the negative view argues that CEOs' hubris is harmful to the firms' performance since hubristic executives often pursue investments that are in their own self-interests and which can harm their firms' performance (Claxton et al, 2015;Zhang et al, 2020).…”

Accounting Executives Narcissism: A Review and Research Agenda Using Content Analysis

“…Prospective CEOs, especially recent graduates, do not fully understand the meaning of the Dark Triad-Black Box (Young et al, 2016). In psychology, leaders have personality traits called the dark triad (Simonet et al, 2016;Carey et al, 2015;Grijalva et al, 2015;Palmer et al, 2020;Plöckinger et al, 2016;Zeitoun et al, 2019). In general, dark triads are classified as narcissism, Machiavellianism, and psychopaths.…”