Activism for Whom? The Role of CEO Narcissism on Firm Engagement in Socially Contentious Issues

Abstract

Research has extensively documented how executives’ personality traits, experience, and personal values shape firm behaviors and outcomes. Narcissism in Chief Executive Officers (CEOs) has been convincingly associated with pursuing risky market strategies but has not been explored in regard to influencing a firm’s nonmarket strategies. We investigate narcissistic CEOs’ involvement with contentious sociopolitical issues (SPIs) to understand whether they also engage in risky nonmarket actions. Drawing from the wider constructs on narcissism in personality psychology research, we argue narcissistic CEOs steer firms toward risky nonmarket actions due to: insensitivity to risks, search for attention, and the need to expose socially desirable identities. Testing for interactions with celebrity status and the degree of national public opposition to the SPI also reflect the likelihood that such involvement is driven strongly by selfish motives. We tested our theoretical model examining firms’ support to the same-sex marriage from 2004-2015 with a random sample of 209 S&P 500 firms. We found support for our model showing that narcissistic CEOs were more likely to engage in SPI, and both low celebrity status and high degree of public opposition strengthen this involvement.