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

Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed... 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/approachUsing 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.FindingsThe 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/implicationsThis 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 implicationsGiven 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/valueThis 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Society and Business Review Emerald Publishing

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

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References (122)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1746-5680
eISSN
1746-5680
DOI
10.1108/sbr-07-2020-0091
Publisher site
See Article on Publisher Site

Abstract

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/approachUsing 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.FindingsThe 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/implicationsThis 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 implicationsGiven 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/valueThis 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.

Journal

Society and Business ReviewEmerald Publishing

Published: Aug 4, 2021

Keywords: Corporate social responsibility; CEO narcissism; CEO overconfidence; Corporate governance; FTSE 400 index

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