CEO narcissism and financial performance: the role of corporate social responsibility

Purpose This study investigates the intricate relationship between chief executive officer (CEO) narcissism, corporate social responsibility (CSR) and financial performance, focusing on the Indonesian business context. Leveraging upper-echelons theory, the research posits that CEO narcissism significantly predicts both CSR initiatives and firms' financial performance. Additionally, it explores CSR as a potential mediator in the link between CEO narcissism and financial performance, with particular focus on the CEO’s involvement in recommending CSR activities. Design/methodology/approach A sample of 644 observations was analyzed, revealing that narcissistic CEOs tend to lead firms with higher CSR engagement, which in turn is positively related to financial performance as measured by Tobin’s Q. Findings Regression models indicate that while CEO narcissism directly related to firm performance, the inclusion of CSR as a variable significantly strengthens this relationship. The indirect association analysis further confirms that CSR mediates the relationship between CEO narcissism on firm performance. Originality/value These findings contribute to the literature by elucidating the dual relationship of CEO narcissism on organizational outcomes and by highlighting the role of CSR in enhancing financial performance. This study also underscores the importance of considering cultural and institutional contexts in understanding the dynamics between executive personality traits and corporate strategies.