Electronic copy available at: http://ssrn.com/abstract=2257441
Can personality traits of Chief Executive Officers (CEOs) be detected at-a-distance?Following newspaper speculation that the banking crisis of 2008 was partly caused by CEO hubris, thispaper analyses the CEO letters to shareholders of a single bank over ten years for evidence of CEOpersonality traits, including: (i) narcissism (a contributor to hubris), (ii) hubris, (iii) overconfidence and(iv) CEO-attribution. Following predictions that hubris increases the longer individuals occupy positionsof power, the research examines whether hubristic characteristics intensify over time.
This paper takes concepts of hubris from the clinical psychologyliterature and applies them to discourses in CEO letters to shareholders in annual reports. The researchcomprises a longitudinal study of the discretionary narrative disclosures in the CEO letters to shareholdersin eight annual reports, benchmarked against disclosures in the CEO letters to shareholders of theprevious and subsequent CEOs of the same organisation.
Results point to evidence of narcissism and hubris in the personality of the Bank CEO. Overhalf the sentences analysed were found to contain narcissistic-speak. In 45% of narcissistic-speak sentences, there were three of more symptoms of hubris – what Owen and Davison (2009) describe asextreme hubristic behavior. In relation to CEO overconfidence, only seven (2%) sentences contained badnews. More than half of the good news was attributed to the CEO and all the bad news was attributedexternally. The research thus finds evidence of hubris in the CEO letters to shareholders, which becamemore pronounced the longer the CEO served.
– The analysis of CEO discourse is highly subjective, and difficult toreplicate.
The primary contribution of this research is the adaptation of the 14 clinicalsymptoms of hubris from clinical psychology to the analysis of narratives in CEO letters to shareholdersin annual reports to reveal signs of CEO hubris.
narrative disclosures, Annual reports, Narcissism, Hubris, CEOs, SocialpsychologyPaper type Research paper