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Executive Hubris: The Case of a Bank CEO
Author(s)
Date Issued
2013
Date Available
2013-11-20T09:10:44Z
Abstract
Purpose: 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, this paper analyses the CEO letters to
shareholders of a single bank over ten years for evidence of CEO personality
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 positions of power, the research
examines whether hubristic characteristics intensify over time.
Design/methodology/approach:
This paper takes concepts of hubris from the clinical
psychology literature and applies them to discourses in CEO letters to shareholders in
annual reports. The research comprises a longitudinal study of the
discretionary narrative disclosures in the CEO letters to shareholders in
eight annual reports, benchmarked against disclosures in the CEO letters to shareholders of
the previous and subsequent CEOs of the same organisation.
Findings: Results point
to evidence of narcissism and hubris in the personality of the Bank CEO. Over half 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 as extreme
hubristic behavior. In relation to CEO overconfidence, only seven (2%) sentences
contained bad news. More than half of the good news was attributed to the CEO
and all the bad news was attributed externally. The research thus
finds evidence of hubris in the CEO letters
to shareholders, which became more pronounced the longer the CEO served.
Research limitations/implications: The analysis of CEO discourse is highly
subjective, and difficult to replicate.
Originality/value:
The primary contribution of this research is the adaptation
of the 14 clinical symptoms of hubris from clinical psychology to the analysis
of narratives in CEO letters to
shareholders in annual reports to reveal signs of CEO hubris.
Keywords Discretionary narrative disclosures, Annual reports, Narcissism, Hubris, CEOs, Social psychology
Type of Material
Journal Article
Publisher
Emerald
Journal
Accounting, Auditing and Accountability Journal
Volume
26
Issue
2
Start Page
172
End Page
195
Copyright (Published Version)
2013, Emerald Group Publishing Limited
Language
English
Status of Item
Peer reviewed
This item is made available under a Creative Commons License
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