The impact of CEO attributes on corporate decision-making and outcomes: a review and an agenda for future research

Abstract

Purpose

The role of chief executive officer (CEO) personal characteristics in shaping corporate policies has attracted increasing academic attention in the past two decades. In this review, the authors synthesize extant research on CEO attributes by reviewing 232 articles published in 29 journals from the accounting, finance and management literature. This review provides an overview of existing findings, highlights current trends and interdisciplinary differences in research approaches and identifies potential avenues for future research.

Design/methodology/approach

To review the literature on CEO attributes, the authors manually collected peer-reviewed articles in accounting, finance and management journals from 2000 to 2021. The authors conducted in-depth analysis of each paper and manually recorded the theories, data sources, country of study, study period, measures of CEO attributes and dependent variables. This procedure helped the authors group the selected articles into themes and sub-themes. The authors compared the findings in various disciplines and provided direction for future research.

Findings

The authors highlight the role of CEO personal attributes in influencing corporate decision-making and firm outcomes. The authors categorize studies of CEO traits into three main research themes: (1) demographic attributes and experience (including age, gender, culture, experience, education); (2) CEO interactions with others (social and political networks) and (3) underlying attributes (including personality, values and ideology). The evidence shows that CEO characteristics significantly affect a wide range of specific corporate policies that serve as mechanisms through which individual CEOs determine firm success and performance.

Practical implications

CEO selection is one of the most crucial decisions made by corporations. The study findings provide valuable insights to corporate executives, boards, investors and practitioners into how CEOs’ personal characteristics can impact future firm decisions and outcomes that can, in turn, inform the high-stake process of CEO recruitment and selection. The study findings have significant practical implications for corporations, such as contributing to executive training programs, to assist executives and directors attain a greater level of self-awareness.

Originality/value

Building on the theoretical foundation of upper echelons theory, the authors offer an integrated theoretical framework to consolidate existing empirical research on the impacts of CEO personal attributes on firm outcomes across accounting and finance (A&F) and management literature. The study findings provide a roadmap for scholars to bridge the interdisciplinary divide between A&F and management research. The authors advocate a more holistic and multifaceted approach to examining CEOs, each of whom embodies a myriad of personal characteristics that comprise their unique identity. The study findings encourage future researchers to expand the investigation of the boundary conditions that magnify or moderate the impacts of CEO idiosyncrasies.

Citation

Osei Bonsu, C., Liu, C. and Yawson, A. (2024), "The impact of CEO attributes on corporate decision-making and outcomes: a review and an agenda for future research", International Journal of Managerial Finance, Vol. 20 No. 2, pp. 503-545. https://doi.org/10.1108/IJMF-02-2023-0092

1. Introduction

Chief executive officers (CEOs) play a crucial role in managing corporations. CEOs are central to formulating corporate policies, overseeing operations, directing strategies and providing accountability. Given their key roles, CEOs have attracted significant academic attention (e.g. Bamber et al., 2010; Bertrand and Schoar, 2003; Graham et al., 2013). Since the seminal paper by Hambrick and Mason (1984) first shed light on the role of individual characteristics of the upper echelons in shaping managerial decision-making, the last two decades have seen an exponential growth in academic research into how CEOs’ personal characteristics affect various aspects of corporate policies and outcomes.

Rooted in upper echelons theory, this paper reviews prior research that examines the link between CEO personal attributes and corporate policies or outcomes across both accounting and finance (A&F) and management literature. Despite the rapid growth of this literature, interdisciplinary divides remain between A&F and management research. Even though both bodies of literature have produced large volumes of interrelated evidence on CEO personal traits, often examining similar and overlapping research questions, researchers do not typically connect their work to the literature outside their own discipline. Similarly, prior review articles typically focus only on studies in a single discipline such as management (Bromiley and Rau, 2016; Busenbark et al., 2016; Neely et al., 2020; Samimi et al., 2022). No prior study has systematically brought together A&F and management research and provided an extensive review of interdisciplinary evidence on the impacts of CEOs’ personal characteristics on various firm-level decisions and outcomes. This results in a substantial loss of opportunity to integrate our present knowledge on CEO personal traits derived from different disciplines to achieve a more consolidated and in-depth understanding. Our review fills this significant gap in the literature by providing the first interdisciplinary review covering A&F and management studies on a diverse spectrum of CEO attributes and corporate outcomes. We provide novel insights into the ways in which researchers from different disciplines vary in their theoretical and empirical approaches when tackling similar research questions, thus contributing important knowledge to the literature.

Every CEO is a unique individual who encapsulates a myriad personal attributes, from demographic characteristics, such as age, race and gender, to underlying traits including personality, ideology and values. Since early literature reviews on upper echelon–related and CEO-related research (Carpenter et al., 2004; Finkelstein et al., 2009; Hoffman et al., 2011), the last decade has seen rapid advances in data technology and availability that enable researchers to access more detailed and nuanced data to explore new CEO personal attributes that had not previously been accessible. This led to an exponential growth in the number of accounting, finance and management studies examining the link between CEO characteristics and firm policies and outcomes. More recent reviews tend to focus on one single CEO characteristic such as narcissism (Cragun et al., 2020), one feature of corporate upper echelon, such as CEO–chair duality (Krause et al., 2014) and CEO–top management team (TMT) interactions (Georgakakis et al., 2019) [1], or examine only one specific aspect of firm-level policy as the outcome of interest, such as innovation (Cortes and Herrmann, 2021). This study builds upon these prior studies by expanding the investigation’s scope to cover all major aspects of CEO personal attributes, thus contributing significantly to the literature by providing a birds-eye view of the current landscape of the interdisciplinary literature on CEO characteristics.

Upper echelons theory provides the key theoretical foundation for this study. It states that managers’ personal biases and dispositions can influence organizational decision-making (Hambrick and Mason, 1984) [2]. Based on this theoretical grounding, we follow the theoretical framework proposed by Bromiley and Rau (2016) who group CEO personal characteristics into three main categories: observable attributes (e.g. age, gender, origin, experience and education), interaction with others (social networks) and underlying attributes (e.g. personality traits, values and ideology). Accordingly, we categorize prior studies that examine various CEO characteristics into these three broad research themes. In reviewing the literature, we conduct a comparative analysis across the interdisciplinary fields of A&F and management in relation to each CEO trait examined.

This study makes three significant contributions to the existing literature. First, we are the first to comprehensively review studies linking CEO personal characteristics to various corporate policies and outcomes across the multiple disciplines of accounting, finance and management. No prior review has covered such a wide range of studies or provided such in-depth interdisciplinary comparative analysis to identify the similarities and differences between A&F and management research. Consequently, the study’s empirical findings offer valuable insights to bridge interdisciplinary chasms and so enable future researchers to expand their horizons beyond their own disciplines to achieve a consolidated view of the extant evidence.

Second, this study makes a theoretical contribution to upper echelons research by offering a new integrated theoretical framework to examine the impacts of CEO attributes on firm success and performance; Busenbark et al. (2016), noting the fragmented theories in the extant CEO literature, propose a “configurational perspective on the CEO” and call for research into CEOs’ impacts on firm performance as a key investigation area. We directly heed this call by synthesizing existing research findings on a wide range of diverse firm policies and outcomes driven by CEO characteristics and consolidating these fragmented outcomes under a novel theoretical framework. Existing research has investigated numerous corporate outcomes such as investment, mergers and acquisitions (M&A), innovation, corporate social responsibility (CSR), leverage decisions, dividend policies, misconduct and firm performance, but no existing theoretical framework offers guidance to connect these corporate outcomes into a single cohesive body of evidence. Building on the framework of Bromiley and Rau (2016), we posit that CEO influence on specific firm policies serves as a mechanism through which CEO personal attributes can affect firms’ financial success, thereby offering a clear theoretical framework to integrate these fragmented corporate outcomes examined in prior studies and to inform future research. One conceptual criticism of upper echelons theory is a lack of systematic evaluation of the conditions that moderate the influence of executive characteristics on firm outcomes (Neely et al., 2020). In our study, we address this criticism by gathering and analyzing existing empirical evidence on the contextual conditions that moderate CEO characteristics and firm outcomes, thus taking a first step toward facilitating the future development of this important area of research.

Third, we make methodological contributions to the existing knowledge by consolidating the empirical approaches used by researchers from both the A&F and management disciplines. One existing critique of research on upper echelons theory is that existing empirical studies use incongruent measures and proxies that partially account for the inconsistent results (Neely et al., 2020). Our review of A&F and management literature provides a high-level overview of some of these methodological similarities and differences, revealing that the empirical measurement used indeed makes a difference to the findings. Thus, we provide valuable information for future researchers by paving the way toward a more synthesized approach to empirically measuring various aspects of CEO characteristics, as advocated by Neely et al. (2020).

The remainder of this paper is organized as follows. Section 2 details the methodology and paper selection. Section 3 discusses the theoretical framework underpinning this study. Section 4 reviews and discusses the prior literature on each specific area of CEO traits. Section 5 offers directions for future research drawn from our findings. Section 6 concludes the paper.

2. Methodology

To review the literature on CEO attributes, we follow prior studies and include only peer-reviewed papers published in academic journals (Åberg et al., 2019; Banerjee et al., 2020; Zattoni et al., 2020). First, we searched various publishers’ websites and databases, including Google Scholar, EBSCO Business Source Complete, Elsevier, Wiley and journal-specific websites, using a series of keywords: CEO, Chief Executive Officer, executive and manager. We manually reviewed article abstracts to ensure that the study examined the impacts of CEOs’ personal attributes. We searched articles published from 2000 to 2021 because research on CEO attributes in A&F literature became the mainstream following the seminal work by Bertrand and Schoar (2003). Our search resulted in 422 published articles. These articles investigated a range of CEO personal attributes, including age, culture, gender, early life, expertise, generalist versus specialist, insider versus outsider, industry experience, international experience, education, overconfidence, narcissism (other) personality traits, political ideology, social network, hobbies and status. Three broad research themes emerged from reviewing these articles, informed by the theoretical framework of Bromiley and Rau (2016). Accordingly, we categorized our reviewed articles into three broad research themes: (1) CEO demographic attributes and experience (including age, gender, origin/culture, early-life experience, expertise, work experience and education); (2) interactions with others (CEOs’ social and political networks) and (3) underlying CEO attributes (personality traits, values, status and ideology).

Second, following prior systematic reviews (Abebe et al., 2020; Darouichi et al., 2021), we applied a selection filter based on journal rankings. Specifically, we included only peer-reviewed articles published in ABS 4 and 4* ranked journals in the fields of accounting, finance and management in addition to the interdisciplinary Journal of Corporate Governance: An International Review, to focus on the most influential articles in the disciplines. We removed 156 articles with this filter. Next, we examined in detail the abstracts, research questions and hypotheses of the remaining 266 studies to gauge their relevance for the review. We included articles that directly examined the impact of CEO attributes on corporate decision-making and outcomes. We excluded 34 papers that did not fit this review’s scope. The result was 232 articles in 29 academic journals. The articles consist of 217 empirical studies and 14 theoretical studies, with 120 papers in the A&F disciplines and 112 in the management discipline.

A list of the reviewed journals is given in Table 1. Among the A&F journals, the Journal of Corporate Finance has published most articles on CEO attributes (43 studies). The Strategic Management Journal tops the management journals with 37 published studies on CEO attributes. Figure 1 shows the number of studies on CEO attributes over time (including the total number of studies, A&F studies and management studies). Over time, there has been an overall increase in the number of studies published, peaking in 2021.

Third, we conducted an in-depth analysis of each paper and manually recorded the theories, data sources, study country, study period, measures of the CEO attributes and dependent variables. This procedure helped us group the selected articles into themes and sub-themes. The descriptive statistics of the sample are shown in Table 2. Researchers predominantly focus on firms in the United States (US) (77% of the studies reviewed). There were relatively few cross-country studies, 3.4% of the sample.

3. Theoretical framework and mechanisms

3.1 Upper echelons theory

Upper echelons theory, developed by Hambrick and Mason (1984, p. 200), states that executives’ personal experiences “shape the lenses through which they view current strategic opportunities and problems”. Managers’ decision-making is inevitably influenced by their personal perspective and assumptions, which are shaped by their experience, values and personalities (Hambrick, 2007; Hambrick and Mason, 1984). As a result, a firm’s strategic choices are affected, to a substantial extent, by the viewpoints and cognitive biases of its manager. Hambrick and Mason’s (1984) upper echelons theory provides the theoretical foundation for most of the reviewed studies on CEO attributes. Hambrick and Mason (1984) emphasize the importance of a dominant coalition of top managers, including the CEO and other members of the TMT. In this review, we focus on CEOs given their key position as the organization’s leader, while acknowledging that the roles of other top managers in the TMT have also been examined in academic research, but that is beyond the scope of this study.

3.2 Key research themes and the novel theoretical framework

Much empirical research has investigated how a diverse range of CEO attributes affect various corporate policies and outcomes in both the A&F and management literature, under the umbrella of upper echelons theory. Prior studies have examined a large number of independent variable (i.e. different CEO characteristics) and dependent variables (i.e. corporate policies or outcomes), yet this body of research remains fragmented in terms of the specific theoretical mechanisms employed. Busenbark et al. (2016) identify three separate existing domains for CEO-related research – the position, the person and the environment. Noting the fragmented theories in existing literature, Busenbark et al. (2016) propose a “configurational perspective on the CEO,” calling for more research into CEOs’ impacts on firm performance as a key area of investigation. We heed their call for more research into CEOs’ impacts on firm performance, by offering an integrated research framework to consolidate the existing fragmented research questions, by synthesizing the various firm outcomes investigated in prior studies into a series of connected research themes.

Existing research offers ample guidance on categorizing different CEO attributes into relevant research themes (Samimi et al., 2022; Bromiley and Rau, 2016). We draw on the theoretical framework of Bromiley and Rau (2016) to categorize CEO attributes in prior research into three broad themes. The first group of studies examines CEO demographics and experience, such as age, gender, career pathways, work experience and education. The second group focuses on CEOs’ interactions with others, including their social and political networks and their connections to the board. The third group of studies examines underlying psychological factors that drive CEO decision-making, such as personality, ideology, status and values [3]. This categorization of the CEO attributes reflects prevailing themes that emerge organically from the prior CEO-related research reviewed in this study.

However, existing theoretical frameworks offer limited guidance on how to integrate the diverse range of corporate outcomes (i.e. dependent variables) examined in prior research. Bromiley and Rau (2016) and Samimi et al. (2022), though providing frameworks for categorizing CEO attributes (i.e. independent variables), treat various firm outcome variables (e.g. performance, strategic choices/actions, social and ethical issues, innovation) merely as a list of parallel dependent variables, without providing insights into how these dependent variables relate to one another or how they can be synthesized into coherent research themes. The lack of a consolidated theoretical framework concerning corporate outcomes results in theoretical fragmentation in the empirical CEO literature, where prior studies examined a myriad of corporate outcomes, including investment decisions, risk-taking, operating strategy, innovation, M&As, debt leverage, dividend policy, CSR, tax avoidance, fraud and firm performance, without connecting the dots on how these different corporate outcomes fit together to form a comprehensive picture.

To address this limitation in the existing theoretical frameworks, we build on Bromiley and Rau (2016) and offer a new integrated theoretical framework to provide insights into the corporate policies and outcomes driven by CEO attributes. Specifically, we posit that CEOs’ individual characteristics ultimately play a role in determining corporate success through influencing a range of specific corporate policies and decisions that, in turn, serve as mechanisms through which CEOs can affect a firm’s financial performance. Drawing on financial economics theory (Modigliani and Miller, 1958) and stakeholder theory (Donaldson and Preston, 1995), we group corporate outcome variables into four main categories: investment decisions (e.g. M&As, innovation, new market expansion), financing decisions (e.g. debt leverage, dividend), corporate misconduct (e.g. tax avoidance, fraud) and firm performance (e.g. accounting performance and market valuation). We posit that specific corporate policies on investment, financing and misconduct serve as channels that, in turn, determine firms’ ultimate success and financial performance. Our integrated theoretical framework is illustrated in Figure 2.

One conceptual criticism of upper echelons theory is a lack of systematic evaluation of the conditions that moderate the influence of executive characteristics on firm outcomes (Neely et al., 2020). In our theoretical framework, we include two boundary conditions introduced by Hambrick (2007) as moderators of the relationship between CEO attributes and firm outcomes. The first moderator, managerial discretion, refers to top executives' freedom to influence corporate performance and make strategic decisions (Crossland and Hambrick, 2011). The second moderator is executive job demand, which predicts that executives with higher job demand will make decisions that reflect their background and dispositions.

3.3 Theoretical mechanisms relating to specific CEO attributes

Upper echelons theory provides the key theoretical underpinning of the empirical investigation into CEOs’ impacts on firm policies and outcomes. Under this overarching theoretical framework, our review documents that researchers in various disciplines rely on specific theories to explain the role of individual CEO attributes and how they shape specific corporate policies and decisions. Given the diverse nature of CEO attributes examined in prior research under the three key research themes (CEO demographic attributes and experience, interactions with others and underlying attributes), in this section we discuss in detail the specific theoretical mechanisms used by prior researchers to establish the link between CEO attributes and firm policies within the research theme. Compared with the A&F discipline, management scholars have more theoretical lenses in developing their hypotheses. Table 3 presents an overview of prior theories used by A&F and management researchers in each of the three research themes.

CEO demographic attributes and experience: Different aspects of CEO demographic characteristics are examined through vastly different theoretical lenses. For example, when studying the impacts of CEO age, researchers commonly use agency theory, career concerns theory and risk aversion theory. Specifically, agency and career concern theories help researchers identify the conflict of interest between shareholders and the longer/shorter career horizon for younger/older CEOs (Andreou et al., 2017; Kalyta, 2009; Yim, 2013). The risk aversion theory underpins the idea that older CEOs become more conservative and less risk-tolerant than their younger counterparts (Barker and Mueller, 2002; Belenzon et al., 2019; Serfling, 2014). Additionally, management scholars use the legacy conservation theory (Kang, 2016), regulatory focus theory (Bilgili et al., 2020) and socioemotional wealth theory (Strike et al., 2015) to explain how CEOs’ approaching retirement age affects strategic decisions.

In CEO gender research, differences emerge between A&F researchers and their management counterparts in terms of the theories they use. A&F researchers place a greater focus on risk aversion theory to explain differences between male and female CEOs, whereas management studies undertake a more behavioral approach by considering Kanter’s token status theory (Gupta et al., 2020), gender stereotyping theory (Lee and James, 2007) and glass cliff theory for female CEOs’ appointment (Cook and Glass, 2014; Ryan and Haslam, 2007, 2009). Management researchers also use a more stakeholder-oriented perspective by using resource dependency theory and strategic choice theory (Ng and Sears, 2017).

In contrast, when studying the role of CEO education and work experience, both A&F and management researchers commonly use human capital theory and resource dependency theory. Researchers do consider other theories such as learning transfer (Hamori and Koyuncu, 2015), legitimacy and ethical theories (Benmelech and Frydman, 2015; Law and Mills, 2017) to examine specific CEO prior work experience impact on strategic decisions. Finally, research into CEO early life experience uses imprinting, post-traumatic, evolutionary and life history theories to examine why early life experience affects CEO behaviors and hence firm decisions (Bernile et al., 2017; Campbell et al., 2019; Kish-Gephart and Campbell, 2015).

CEO interactions with others: Agency theory, social network theory and resource dependency theory are the three predominant theories used in the study of CEO networks. Social network theory states that CEOs can establish relationships with other executives and board members through external networks based on employment, education and other social activities, such as clubs, charities, sporting associations and not-for-profit organizations (Faleye et al., 2014; Fracassi, 2016). Resource dependency theory suggests that social networks enable CEOs to obtain relevant information and access to precious resources to help their firms advance strategic initiatives and combat challenges in competitive environments (Cao et al., 2015; Chen et al., 2021; Geletkanycz and Boyd, 2011). Agency theory provides a competing view to the resource dependency theory by stating that CEO social networks could provide channels for managerial opportunism and entrenchment as CEOs divert firm resources into advancing their personal agenda (Chikh and Filbien, 2011; El-Khatib et al., 2015; Griffin et al., 2021). Researchers who examine CEOs’ tendency to seek advice from their networks rely on the self-categorization, social support and social identification theories (McDonald and Westphal, 2003, 2011).

CEO underlying attributes: Many studies rely on upper echelons theory to explain why CEOs’ personal ideology, personality, hobbies and values affect their corporate decision-making. In addition to upper echelons theory, both A&F and management research draws on the behavioral consistency (Bhandari and Golden, 2021; Elnahas and Kim, 2017) and social identity theories (Hutton et al., 2014) to link these underlying attributes of CEOs to corporate decisions. The behavioral consistency theory posits that individuals behave consistently across different situations (Cronqvist et al., 2012), leading researchers to hypothesize that CEOs who behave in a certain way in their personal life (e.g. willing to take on personal debt) will behave in a similar manner in corporate decision-making (i.e. high corporate leverage). The social identity theory predicts that individuals derive their personal identity from the norms, values and attributes of their social group (Hutton et al., 2014); CEOs’ personal political ideology thus constitutes a salient factor in determining corporate decisions.

In the literature examining CEO personality traits, studies rely on leadership theory that posits that individual leaders’ personal styles make a difference in organizational management (Cragun et al., 2020; Hoffman et al., 2011). The specific personality traits studied, such as narcissism and the five factors of CEO personality, are grounded in psychology theory (Aktas et al., 2016) and personality theory (Chatterjee and Hambrick, 2011; Gerstner et al., 2013; Gupta et al., 2019). Researchers also rely on hubris theory (Roll, 1986) and subsequently develop overconfidence theory (Malmendier and Tate, 2008) to explain why CEOs, driven by over-assessment of their own ability, behave in a way that may not necessarily be utility maximizing under modern portfolio theory (Kolasinski and Li, 2013). CEO conduct driven by overconfidence is also studied under behavioral decision theory (Li and Tang, 2010) and behavioral agency theory (Benischke et al., 2019), which offers an alternative explanation to traditional agency theory in explaining CEO behavior (Fama and Jensen, 1983; Jensen, 1986; Malmendier and Tate, 2005). Malmendier and Taylor (2015) use the psychology theory of cognitive dissonance to explain why overconfidence persists as a common behavioral trait.

Depending on the nature of the corporate outcome examined, studies have also drawn on other outcome-specific theories, including ethical theory for predicting CSR (Davidson et al., 2018) and bounded rationality theory in studying crisis responses (König et al., 2020). Finally, researchers also rely on procedural rationality theory to examine how corporate procedures can counteract CEOs’ innate impulses resulting from underlying personal traits (Pavićević and Keil, 2021).

4. Review findings

4.1 CEO demographic and experience

The impact of CEO demographic attributes and experience has attracted attention in both the A&F and management literature. We categorize existing studies into two groups based on whether they are intrinsic (given) or acquired (skills, knowledge and experience). There are 106 studies on this theme in the review, 51 in A&F and 55 in management.

4.1.1 Intrinsic attributes

4.1.1.1 Methodology and overview of findings

Intrinsic attributes fall into four areas: (1) age, (2) gender, (3) culture and (4) early-life experience and place of birth. There are 29 studies in A&F and 35 in management. In both disciplines, age is measured in years (Barker and Mueller, 2002; Yim, 2013), gender is a dummy equal to 1 for female CEOs and zero otherwise (Huang et al., 2016; Lee and James, 2007) and culture is measured using Hofstede’s (1980, 1991, 2001) and Hofstede et al.’s (2010) cultural dimensions. CEO early-life experience measures are the great depression, natural disaster/traumatic experience, the Great Chinese Famine, hometown connections, family social class, order of birth and poverty (Bernile et al., 2017; Jiang et al., 2019; Kong et al., 2021). A&F and management scholars have shown the same interest in CEO age and firm outcomes. The findings in both disciplines suggest that career concerns and risk-taking appetite are key in shaping younger and older CEOs’ firm decisions. A&F studies focus more on the risk-taking behavior of female CEOs, whereas management interest has been on examining the conditions surrounding the appointment of female CEOs and the market’s reaction to such appointments. The focus of A&F and management researchers on CEO culture has been relatively low. Only five studies explore the impact of CEOs’ cultural background on firm performance. A&F researchers focus on CEO early-life experiences of external factors, whereas management researchers have paid more attention to CEO early-life family experience.

4.1.1.2 A&F studies

Age: A&F researchers have focused more on heterogeneity in agency problems associated with career concerns for younger and older CEOs. To this end, A&F researchers have examined the impact of CEO age on various corporate policies such as M&As (Jenter and Lewellen, 2015; Yim, 2013), accounting discretion (Kalyta, 2009), stock price crash (Andreou et al., 2017), research and development (R&D) (Aktas et al., 2021) and firm value (Goergen et al., 2015). Insights from the studies show that because of a longer career horizon for younger CEOs, they have financial incentives to engage in investments that may not generate value for shareholders (Andreou et al., 2017; Yim, 2013). Other studies show that the shorter career horizon of CEOs near retirement reduces agency cost (Aktas et al., 2021; Jenter and Lewellen, 2015). A number of studies have examined the impact of CEO age on firm strategic risk-taking (Beber and Fabbri, 2012; Bertrand and Schoar, 2003; Li et al., 2017; Serfling, 2014). The main findings are that, compared with younger CEOs, older CEOs take less strategic risk because older CEOs may lack mental and physical stamina and the ability to acquire new concepts and learn new behaviors (Bertrand and Schoar, 2003; Serfling, 2014). In sum, these studies show that career concerns and risk-taking appetite are key in shaping younger and older CEOs’ firm decisions.

Culture: Culture is defined as “the collective programming of the mind that distinguishes the members of one group or category of people from others” (Hofstede et al., 2010, p. 6). The few studies in A&F show that the cultural background of CEOs impacts their firms’ outcomes (Nguyen et al., 2018). Using uncertainty avoidance as a proxy for corporate risk-taking behavior, A&F researchers find that firms managed by CEOs of a high-uncertainty avoidance cultural heritage have lower investment in R&D and undertake few acquisitions (Pan et al., 2017, 2020). For executive compensation, Guo et al. (2021) show that there is no racial gap in CEO compensation.

Early-life experience and place of birth: Theory on early-life experiences suggests that childhood experiences form lasting imprints on individuals’ orientation that does not change through subsequent experiences (Marquis and Tilcsik, 2013). This imprinting has a significant effect on managers’ mental model and impacts their decision-making (Holburn and Zelner, 2010). Building on imprinting and post-traumatic theories, A&F researchers have examined the impact of CEOs’ early-life experiences on firm investment and financing policy (Bernile et al., 2017; Chen et al., 2021; Kong et al., 2021; Malmendier et al., 2011). The next strand of studies draws on agency, home bias and place of attachment theories to examine CEO investment in their home town. The findings show that CEOs are more likely to make investments in their birth place because of information advantage that helps them make value-enhancing investments (Jiang et al., 2019; Lim and Nguyen, 2020). In addition, CEOs working near their birth place are more supported by the board because of social ties to make long-term investments such as R&D (Lai et al., 2020; Ren et al., 2021) and easy access to credit (Kong et al., 2020). Supporting the agency theory, A&F scholars show that some investments in CEOs’ home town are for own private benefit (Jiang et al., 2019; Yonker, 2017).

Gender: A&F researchers have shown more interest in risk aversion theory to explain corporate policies for male and female CEOs. These studies emphasize that, compared with their male counterparts, female CEOs are less overconfident and, as a result, take less strategic risk. For example, they show that firms managed by female CEOs have lower leverage (Faccio et al., 2016; Huang and Kisgen, 2013) and a negative relationship with stock price crash risk (Li and Zeng, 2019) and are less likely to engage in corrupt practices (Hanousek et al., 2019). Research highlights that hedge fund activists are more likely to target female-led firms because of the cooperative leadership style of female CEOs (Francis et al., 2021).

4.1.1.3 Management studies

Age: Like the A&F literature, management scholars have analyzed the effect of career horizon of younger and older CEOs on firm outcomes. Using the agency theory perspective together with legacy conservation, management studies consider incentives for strategic decision-making as CEOs approach retirement (Heyden et al., 2017; Kang, 2016; Lee et al., 2018; Matta and Beamish, 2008; Strike et al., 2015). Supporting the agency theory, findings suggest that CEOs near retirement prefer short-term strategic decisions that produce fast wins to benefit their short-term self-objectives above the firm’s long-term interests (Lee et al., 2018; Matta and Beamish, 2008). However, the importance of legacy conservation for CEOs who remain on their company’s board after retirement and CEOs of family firms reduce their short-term focus, leading to long-term strategic decisions such as international acquisitions and CSR (Kang, 2016; Strike et al., 2015). Management researchers have examined the risk-taking behavior in firms managed by younger and older CEOs and find results consistent with A&F (Barker and Mueller, 2002; Belenzon et al., 2019; McClelland et al., 2010). Building on the regulatory focus and human capital theories, management researchers provide insights into the psychological motivations that underline strategic decisions by CEOs approaching retirement (Bilgili et al., 2020; Theissen and Theissen, 2020) and CEO departure after corporate acquisitions (Buchholtz et al., 2003).

Culture: The focus of management researchers on CEO culture has been relatively low. The only two published studies explore the impact of CEO cultural background on firm performance. Insights from those studies show that individualistic cultures give more power to CEOs to influence their firms’ economic choices and outcomes (Crossland and Hambrick, 2007). This has been found to be associated with negative post-acquisition performance in cross-border acquisitions (Zhu et al., 2020).

Early-life experience and place of birth: A&F researchers focus on CEO early-life experiences related to external factors, whereas management researchers have paid more attention to CEO early-life experience in their families. Drawing insights from evolutionary, life history and imprinting theories, management scholars have examined CEO order of birth and family social class on firm strategic risk. These studies’ findings show that firm risk is higher for later-born CEOs (Campbell et al., 2019) and CEOs born into lower and upper class families (Kish-Gephart and Campbell, 2015). A current study builds on post-traumatic growth theory and finds a positive relationship between CEO early-life exposure to natural disasters and CSR (O’Sullivan et al., 2021).

Gender: Compared with the A&F literature that focusses more on risk aversion to explore female CEOs corporate decisions, management scholars have been more interested in examining the conditions surrounding the appointment of female CEOs (Adams et al., 2009; Cook and Glass, 2014; Dwivedi et al., 2018; Klein et al., 2021; Muller-Kahle and Schiehll, 2013; Ryan and Haslam, 2007, 2009), the market’s reaction to female CEO appointment (Brinkhuis and Scholtens, 2018; Cook and Glass, 2011; Dixon-Fowler et al., 2013; Lee and James, 2007) and the performance of female CEOs (Bigelow et al., 2014; Dezsö and Ross, 2012; Gupta et al., 2020; Ng and Sears, 2017; Park and Westphal, 2013; Zhang and Qu, 2016). Insights from these studies suggest that female CEOs are more likely to be appointed when the firm is underperforming (Cook and Glass, 2014; Ryan and Haslam, 2007, 2009). Moreover, appointments of female CEOs receive more negative announcement returns than for male counterparts (Dixon-Fowler et al., 2013; Lee and James, 2007). In addition, the appointment of female CEOs is associated with higher severance packages than for male CEOs (Klein et al., 2021) and, compared with their male counterparts, female CEOs are more likely to be fired even when the firm is performing well (Gupta et al., 2020). In sum, these studies show that female CEOs face higher risks than male counterparts.

4.1.2 Acquired attributes

4.1.2.1 Methodology and overview of findings

Firms’ decisions are influenced by the CEO’s previous functional experience (Hambrick, 2007). In support of this view, various studies have examined the impact of a CEO’s prior work experience to show that CEOs with functional experience are more adept at addressing difficulties in relevant functional areas. We grouped CEO acquired attributes into (1) CEO function track and other career experience and (2) education. In the A&F literature, we find 15 studies on the functional track and 6 studies on education. In management, there are 21 studies on the functional track and other career experience and 2 studies on education. Measures of CEO functional track and other career experience are finance experience (Custódio and Metzger, 2014), generalist versus specialist experience (Li and Patel, 2019), industry experience (Custódio and Metzger, 2013), insider versus outsider CEOs (Zhang and Rajagopalan, 2004), international experience (Carpenter et al., 2001), military experience (Benmelech and Frydman, 2015) and recession experience (Schoar and Zuo, 2017). Education is measured by whether the CEO has an MBA degree (King et al., 2016), has attended an Ivy League school (Miller et al., 2015) or has law degree (Bamber et al., 2010). We find no study on finance experience in the management literature and no study on insider and outsider CEOs in the A&F literature. While the interest of A&F scholars in generalist CEOs has been on firm financing, management studies focus on strategic risk. There is consistent evidence in the A&F and management literature that military CEOs are less likely to engage in corporate fraud because of the values of integrity and loyalty they receive during their military training (Benmelech and Frydman, 2015; Koch-Bayram and Wernicke, 2018).

4.1.2.2 A&F studies

Finance experience: A CEO has finance experience if he/she has past experience in either banking or investment firms or in a large auditing firm (Custódio and Metzger, 2014). A&F scholars emphasize the importance of CEO finance experience on the ability to raise capital and reporting quality. Primarily, these studies show that CEOs with a finance background have the skills and experience to communicate effectively to financial markets and, as such, can raise external funds even under tight market conditions and their firms have fewer internal control weaknesses (Custódio and Metzger, 2014; Oradi et al., 2020).

Generalist versus specialist experience: Generalist CEOs are those with a broader set of management abilities and knowledge accumulated over their career in different industries and firms. Specialist CEOs are CEOs with a limited but more comprehensive set of knowledge and skills that are more directly related to a specific industry or firm (Custódio et al., 2013). A common focus in the A&F literature relates to generalist and specialist CEOs’ impact on corporate financing. These studies show that generalist CEOs can raise external funds because of their social connections (Hu and Liu, 2015) but have a higher cost of capital because of the agency cost associated with generalist CEOs’ human capital (Mishra, 2014). Gounopoulos and Pham (2018) show that initial public offerings (IPOs) issued by specialist CEOs have lower chance of failure because of the alignment of specialist CEOs’ incentives to shareholders’ interest.

Industry/International experience: A&F scholars document that CEO-specific industry experience provides an information advantage and human capital that generates value for shareholders. These include higher M&A returns (Custódio and Metzger, 2013; Fich and Nguyen, 2020), better decisions on corporate divestiture (Huang, 2014) and innovation output (Islam and Zein, 2019). In addition to industry experience, recent studies emphasize that CEO-specific international experience provides an international network that is crucial for firms competing in a global context, leading to a positive impact on their international investment (Conyon et al., 2019; Ding et al., 2021).

Military experience: Serving in the military inculcates the values of loyalty and integrity that could impact an individual’s decision-making (Benmelech and Frydman, 2015; Franke, 1998, 2001). A&F scholars conclude that CEOs with military experience are less likely to engage in corporate misconduct than their counterparts with no military experience. For example, Benmelech and Frydman (2015) find that CEOs with military experience are 70% less likely to engage in corporate fraud. Such CEOs are also less likely to engage in corporate tax avoidance (Law and Mills, 2017).

Recession/distress experience: The A&F literature on the impact of CEO recession experience underlines that CEO recession experience during their tenure and before their tenure as CEO is associated with conservative corporate policies (Blank and Hadley, 2021; Schoar and Zuo, 2017).

Education: Education can impact CEOs’ cognitive complexity, innovation and firm performance (Finkelstein et al., 2009). Studies in A&F have analyzed the impact of CEO education on firm outcomes. These studies draw insights from human capital theory together with social network and familiarity bias theories to develop their hypotheses. Building on the human capital theory, some studies explore the impact on firm performance (Bennedsen et al., 2020; King et al., 2016). Studies basing their theoretical framework on social network theories examine the impact of CEO education on capital raising and M&As (Gounopoulos et al., 2021; Wang and Yin, 2018). Some studies find that firms managed by CEOs with MBA degrees perform better than their peers and that CEO education level has a positive impact on M&A returns (King et al., 2016). Studies analyzing CEO education on firm risk-taking show that CEOs with MBA degrees are more likely to pursue aggressive corporate policies (Beber and Fabbri, 2012; Bertrand and Schoar, 2003). One potential reason for this aggressive behavior is that executives with MBAs are more skilled in strategic decision-making and, as a result, are better able to perceive and capitalize on opportunities that raise a firm's worth (Geletkanycz and Black, 2001). Because of heightened sensitivity to lawsuit risk, CEOs with a legal education frequently revise earnings expectations downward (Bamber et al., 2010).

4.1.2.3 Management studies

Generalist vs specialist experience: While the interest of A&F scholars in generalist CEOs has been on firm financing, management studies have analyzed the impact of generalist CEOs on innovation (Custódio et al., 2019), strategic novelty (Crossland et al., 2014) and firm performance (Chen et al., 2021; Li and Patel, 2019). The findings suggest that generalist CEOs are associated with higher strategic risk (Custódio et al., 2019) and perform better at diversifying acquisitions (Chen et al., 2021) but their firms have lower Tobin’s Q (Li and Patel, 2019).

Industry/international experience: Management scholars have explored the relationship between experience in a CEO position of a previous firm and performance in the current firm (Bragaw and Misangyi, 2017; Hamori and Koyuncu, 2015) and CEO prior experience in operations on firm performance (Koyuncu et al., 2010). These studies highlight that past CEO positions in another firm are associated with a negative performance in the current firm (Bragaw and Misangyi, 2017; Hamori and Koyuncu, 2015). For CEO international experience, management research shows the knowledge and networks acquired during international experience help improve firm performance (Carpenter et al., 2001; Daily et al., 2000). Other studies highlight the importance of risk-taking propensity for foreign market entry (Daily et al., 2000; Nielsen and Nielsen, 2011).

Insider vs outsider CEOs: Though we found no study in the A&F literature on the impact of insider versus outsider CEOs on firm outcomes, management scholars have paid attention to the impact on firm performance and strategic change (Cummings and Knott, 2018; Quigley et al., 2019; Shen and Cannella, 2002; Zhang and Rajagopalan, 2004, 2010). Other studies consider contextual factors that can impact the performance of outsider and insider CEOs (Karaevli, 2007; Karaevli and Zajac, 2013; Keil et al., 2021; Zhu et al., 2020).

Military experience: The impact of military experience on firm outcomes has received relatively little attention in the management literature. The one study we found shows evidence consistent with the A&F literature that military CEOs are less likely to engage in corporate fraud because of the values of integrity and loyalty received during their military training (Koch-Bayram and Wernicke, 2018).

Education: Management scholars have shown that because of their high human capital, firms managed by CEOs with undergraduate degrees from Ivy League universities have higher firm valuations than peers without such a degree (Miller et al., 2015). Other studies show that CEOs with a law degree are more conservative in their corporate policies such as lower R&D spending and environmental disclosure (Barker and Mueller, 2002; Lewis et al., 2014). Having an MBA degree is associated with a higher likelihood of voluntary environmental disclosure (Lewis et al., 2014).

4.2 CEO interactions with others

4.2.1 Methodology and overview of findings

The impact of CEO social networks on corporate policies and outcomes is a growing research area in both the A&F and management literature. We found 34 studies in the review, 20 in A&F and 14 in management, that are related to CEOs’ social networks. A&F scholars focus more on CEO-board networks. Of the 20 studies in A&F, 11 are on CEO-board networks, 6 are on CEOs’ external networks and 3 are on political networks. Management scholars’ interest has been on CEOs’ external networks; of the 14 articles in the discipline, 13 focus on external network and 1 focuses on CEO-board networks. In the A&F and management literature, three main types of social networks have been examined for their impact on corporate policies and firm outcomes. These are the CEO-board social connection measured as a dummy equal to one and zero otherwise if the CEO and company directors are connected through (1) having worked together either as employees or directors in previous jobs; (2) having private connections outside their current employment, such as belonging to the same country clubs, attending Business Roundtable meetings together or serving as trustees for the same charitable organization; and (3) having attended the same school and graduated within 1 year of each other (Fracassi and Tate, 2012). The second type of connection is CEO external connection measured as a count of the number of outside individual connections the CEO has through employment, education or other social organizations (El-Khatib et al., 2015; Ferris et al., 2017) or as the number of outside directorships (Geletkanycz and Boyd, 2011; Oh and Barker, 2018). The third connection is CEO political connections measured as dummy equal to one if the CEO is or was previously (1) a central government official, (2) a local government official, (3) a military officer, (4) a member of the standing committee of the National People's Congress and/or (5) a member of the Chinese People's Political Consultative Conference (Cao et al., 2017). While A&F studies mostly measure CEO networks using secondary data such as BoardEx, management studies mostly use surveys and questionnaires to obtain data on CEO networks.

4.2.2 A&F studies

CEO-board network: A&F scholars have shown that social connections between the CEO and board members reduce monitoring efficacy and weaken corporate governance (Fracassi and Tate, 2012). A reduction in the oversight responsibility of the board results in lower financial report quality (Bruynseels and Cardinaels, 2014; Carcello et al., 2011), higher CEO compensation (Balsam et al., 2017; Hwang and Kim, 2009), poor investments, such as acquisitions that destroy value (Fracassi and Tate, 2012; Schmidt, 2015), inefficient labor investment (Khedmati et al., 2020) and a reduction in R&D spending that enables the CEO to meet a performance target (Rose et al., 2014). In addition, a CEO-board network increases the probability of corporate fraud (Khanna et al., 2015); such CEOs are less likely to be fired even when they perform poorly (Hwang and Kim, 2009). The lower probability of socially connected CEOs being fired increases firms’ risk-taking (Fan et al., 2021). However, a CEO-board social network is beneficial to shareholders in acquisitions where the advisory role of the board is needed (Schmidt, 2015) and for new product development when there is board interlock (Wu, 2008).

External networks: Scholars in A&F conclude that CEO external networks serve as an insurance against the discipline of the labor market (El-Khatib et al., 2015; Faleye et al., 2014; Griffin et al., 2021). This insurance increases the risk-taking behavior of well-connected CEOs (Ferris et al., 2017), higher earnings management (Griffin et al., 2021) and M&As associated with negative announcement returns (Chikh and Filbien, 2011; El-Khatib et al., 2015). A CEO’s outside directorship(s) reduces the managerial efficiency of the firm (Mutlu et al., 2021). Nevertheless, the risk-taking behavior of well-connected CEOs increases firm innovation output (Faleye et al., 2014).

Political network: A&F scholars have examined the impact of CEOs’ political connections on firm performance (Sun and Zou, 2021). The findings suggest that companies managed by politically connected CEOs are more likely to appoint bureaucrats to their board than directors with relevant professional expertise. This has a negative impact on firm performance (Fan et al., 2007). In addition, CEOs who are politically connected have a lower likelihood of turnover even when they perform poorly (Cao et al., 2017).

4.2.3 Management studies

CEO-board networks: The impact of CEO-board networks on firm outcomes has received relatively little attention in management literature. The one study we found shows consistent evidence, as in the A&F literature, that social ties between the CEO and directors reduces the likelihood of the CEO being fired even when they perform poorly (Nguyen, 2012).

CEO-external networks: Management scholars have analyzed CEOs’ external network advice during periods of bad performance (McDonald et al., 2008; McDonald and Westphal, 2003), social support from other corporate leaders during times of personal difficulties (McDonald and Westphal, 2011) and the consequences of CEOs external networks with corporate leaders (Chen et al., 2009; Westphal et al., 2006). These studies emphasize that CEOs’ external advice and support from external networks have a positive impact on firm performance (McDonald et al., 2008; McDonald and Westphal, 2011). Another research stream has examined the impact of CEO outside directorship on their firms’ R&D investment (Oh and Barker, 2018) and the benefits that accrue to their firms (Geletkanycz and Boyd, 2011; Geletkanycz et al., 2001). The management literature shows that CEOs’ external networks have a positive impact on CSR initiatives (Chen et al., 2021), similarity in corporate policies (Fracassi, 2016), higher strategic risk that improves firm performance (Opper et al., 2017), useful innovative ideas that increase the entrepreneurial orientation of the firms (Cao et al., 2015) and a negative impact on firms' long-term strategic planning (Opper and Burt, 2021).

4.3 CEO underlying attributes

4.3.1 CEO personality

Numerous studies have examined CEOs’ personality as a predictor of corporate policies in both the A&F and management literature, with 30 A&F studies and 28 management studies. Significant divergence exists between A&F and management research in both the CEO personality traits of interest (and how they are measured) and the corporate outcomes examined. The most striking fault-line lies in the personality traits examined: A&F researchers focus more on CEO overconfidence, whereas management researchers are more interested in CEO narcissism and other aspects of personality traits derived from psychology theories. Overconfidence studies dominate the A&F studies on CEO personality; of the 30 A&F papers reviewed, 25 examine CEO overconfidence and only 3 investigate narcissism. In contrast, in the management literature comprising 28 studies, over half (15 papers) study CEO narcissism and 6 examine CEO overconfidence. Overconfidence and narcissism are two closely related personality traits but, in some contexts, have different impacts on corporate policies.

4.3.1.1 CEO overconfidence

4.3.1.1.1 Methodology and overview of findings

Overconfidence is an important psychological trait that has attracted substantial research attention. The reviewed literature comprises 31 studies on overconfidence, 25 A&F studies and 6 management studies. The prevailing empirical measure of CEO overconfidence was developed by Malmendier and Tate (2005, 2008), who propose using a CEO’s personal holdings of in-the-money stock options as a measure of CEO overconfidence. Malmendier and Tate (2005) argue that CEOs’ persistent holding of undiversified vested stock options in their personal portfolios indicates their overconfident belief in their own ability and the future performance of their firm. Overconfidence and hubris are used interchangeably in the literature (Li and Tang, 2010) [4]; hubris is similar to overconfidence (Gervais et al., 2011). In addition to the options-based measure, Malmendier and Tate (2008) use press portrayal of CEOs as an alternative proxy of overconfidence [5], which is widely used (Hirshleifer et al., 2012). In addition to these archival measures of CEO overconfidence, management researchers have used primary data collected from CEO surveys to measure CEOs’ self-assessed overconfidence level (Li and Tang, 2010).

4.3.1.1.2 A&F studies

A&F researchers have examined the impact of CEO overconfidence on a variety of A&F finance decisions. A&F research, pioneered by Malmendier and Tate (2005), focuses on financing and investment decisions and outcomes; financing decisions include the value of corporate cash holdings (Aktas et al., 2019; Chen et al., 2020), dividend payout (Deshmukh et al., 2013), use of short-term debt (Huang et al., 2016) and cost of debt capital (Lin et al., 2020). Investment decisions include investment sensitivity to cash flow (Malmendier and Tate, 2005, 2015), M&As (Aktas et al., 2009; Ferris et al., 2013; Kolasinski and Li, 2013; Malmendier and Tate, 2008) and corporate innovation (Hirshleifer et al., 2012). In addition, A&F studies also examine financial reporting practices, including accounting conservatism (Ahmed and Duellman, 2013; Hsu et al., 2017), goodwill impairment (Chung and Hribar, 2020), tax aggressiveness (Chyz et al., 2019) and management forecasts (Hribar and Yang, 2016).

A&F researchers are also interested in how CEO overconfidence affects firm risks, such as litigation risk (Banerjee et al., 2018; Schrand and Zechman, 2012), stock price crash risk (Kim et al., 2016) and information risk (Goel and Thakor, 2008). A subset of A&F research has examined the risk of banking institutions, in particular, and links CEO overconfidence to more lax bank lending standards and increased vulnerability to financial crises (Ho et al., 2016).

Overall, A&F researchers are primarily interested in studying how CEO overconfidence affects firm performance and risks. Given that overconfidence is linked to riskier financing and investment policies, the existing evidence suggests that firms managed by overconfident CEOs experience greater risks and more volatile returns (Hirshleifer et al., 2012). Only a small number of A&F researchers expand the investigation of overconfidence-driven consequences beyond firms’ financial policies to focus on other stakeholder groups (Phua et al., 2018; Sauerwald and Su, 2019). Overconfident CEOs can secure stronger stakeholder commitments from suppliers and employees (Phua et al., 2018) but are more likely to exhibit dissonance between CSR reporting tone and actual CSR performance (Sauerwald and Su, 2019).

4.3.1.1.3 Management studies

In contrast to A&F researchers who focus more on firms’ financial success, management researchers are more interested in corporations’ internal processes that lead to these outcomes, such as how overconfident CEOs respond to feedback (Chen et al., 2015; Schumacher et al., 2020) and how overconfidence is developed as a personality trait in the organizational context (Vitanova, 2021). Some areas of investigation by management researchers overlap A&F research by examining similar outcome variables, including corporate innovation (Galasso and Simcoe, 2011) and M&As (Pavićević and Keil, 2021). These studies document evidence consistent with A&F research that overconfident CEOs are more innovative (Galasso and Simcoe, 2011; Hirshleifer et al., 2012) and more acquisitive (Malmendier and Tate, 2008; Pavićević and Keil, 2021). Nevertheless, even when examining similar corporate policies such as M&As, unlike A&F researchers who focus on financial M&A outcomes (e.g. overconfident CEOs pay higher premiums in M&A deals (Malmendier and Tate, 2008)), management researchers focus more on the internal corporate decision-making that leads to such outcomes, e.g. by examining the pacing of pre-deal processes that led to overpayment for M&As by overconfident CEOs (Pavićević and Keil, 2021).

In addition to measuring CEO overconfidence using the proxy of vested stock options (Malmendier and Tate, 2005, 2008), which is prevalent among A&F researchers, management studies also use primary data on CEOs’ self-assessed level of hubris, collected through CEO surveys, and document that overconfident CEOs increase corporate risk-taking (Li and Tang, 2010).

4.3.1.2 CEO narcissism

4.3.1.2.1 Methodology and overview of findings

Narcissism is another important CEO personality trait that has attracted extensive research attention. We found 20 articles on CEO narcissism, 3 in A&F and 17 in management. Chatterjee and Hambrick (2007, 2011) developed a composite index of CEO narcissism by observing a suite of behavioral indicators: the size of the CEO’s photograph in annual reports, CEO prominence in press releases, the use of first-person singular pronouns in interviews and vertical executive pay (CEO pay relative to the second-highest paid executive). These indicators have been widely adopted by subsequent management researchers (e.g. Kashmiri et al., 2017).

CEO narcissism is documented as influencing many areas of firm decision-making in a similar direction to overconfidence (Cragun et al., 2020). Narcissistic CEOs are willing to take higher risks when making investment decisions (Buyl et al., 2019) and invest more in M&As (Chatterjee and Hambrick, 2007), new technology (Gerstner et al., 2013) and R&D (Ham et al., 2018). In the M&A context, narcissistic CEOs are more acquisitive and complete deals faster (Aktas et al., 2016).

4.3.1.2.2 A&F studies

Compared with management research, where CEO narcissism dominates academic attention as the key personality trait of interest, relatively few A&F studies have examined CEO narcissism. The limited A&F research on CEO narcissism studies its impacts on financial reporting (Abdel-Meguid et al., 2020) and risky investments through pursuing M&As (Aktas et al., 2016).

4.3.1.2.3 Management studies

In contrast, management research has produced extensive evidence on the impacts of CEO narcissism on corporate policies. Though most A&F researchers focus on CEO overconfidence, the majority of management research focuses on CEO narcissism; these two bodies of research overlap in the outcomes of interest investigated. Specifically, like A&F research that examines CEO overconfidence, management researchers use CEO narcissism to predict corporate risk-taking (Buyl et al., 2019), likelihood of litigation (O’Reilly et al., 2018), investments through M&As (Chatterjee and Hambrick, 2007) and innovation (Kashmiri et al., 2017; Zhang et al., 2017) and ultimately firm performance (Chatterjee and Hambrick, 2007) and volatility (Chatterjee and Hambrick, 2007; Wales et al., 2013).

Management researchers again exhibit a stronger focus on internal corporate decision-making by examining the way in which narcissism affects CEOs’ response to feedback, such as that from past performance (Chatterjee and Hambrick, 2011), and how narcissism affects CEOs’ interactions with other members of the upper echelons such as board members (Zhu and Chen, 2015). Several outcomes of interest are prevalent in management research but less so in A&F research. First, management researchers examine how CEO narcissism affects firms’ strategic dynamism and willingness to embark on radical changes (Chatterjee and Hambrick, 2007; Gerstner et al., 2013). Second, management researchers examine the impacts of CEO narcissism on stakeholder groups; specifically, CSR (Kim et al., 2018; Petrenko et al., 2016) and employee downsizing (Gupta et al., 2019). Tang et al. (2018) were the first to directly compare the effects of CEO narcissism and overconfidence on CSR, documenting that narcissistic CEOs tend to invest more in CSR, whereas overconfident CEOs invest less in CSR. Finally, management researchers pay more attention not only to the consequences of CEO narcissism but also to how such narcissism is developed and fostered and its effects on firms’ internal leadership and decision-making (Billett and Qian, 2008; Chatterjee and Pollock, 2017; Yi et al., 2020).

4.3.1.3 Other personality traits

4.3.1.3.1 Methodology and overview of findings

Compared with A&F researchers, management researchers examine a wider, more nuanced range of personality traits derived from psychology research (Benischke et al., 2019; Harrison et al., 2019). The vast majority of studies on personality traits besides overconfidence and narcissism were conducted by management researchers (8 of 9 studies reviewed). Management researchers have used five personality factors to examine five specific CEO personality traits: conscientiousness, emotional stability/neuroticism, agreeableness, extraversion and openness to experience (Herrmann and Nadkarni, 2014; Nadkarni and Herrmann, 2010). Studies have explored other individual aspects of CEO personality, such as confidence and humility (Petrenko et al., 2019) or temporal focus (Gamache and McNamara, 2019).

Researchers have used three alternative approaches to collect data on these aspects of CEO personality: primary data through surveys, textual analysis based on publicly available security data or by using an experimental setting. The first method relies on primary data collection from CEO surveys to gauge self-assessed personality traits (Benischke et al., 2019). The second involves conducting text analysis based on publicly available CEO speeches to assess CEO personality traits as perceived from these speeches (Harrison et al., 2020; Malhotra et al., 2018). The third method is designed to capture CEO personality as perceived by others, rather than the investigation subject. Researchers use either an experimental setting where participants provide assessments of the CEOs’ perceived personality (Huang et al., 2021) or a videometric approach using third-party assessments of CEO personality based on a CEO’s public video-recordings (Petrenko et al., 2019).

4.3.1.3.2 A&F studies

Few A&F studies delve into other aspects of CEO personality traits than the popular trait of overconfidence and the less investigated trait of narcissism. Only one A&F study (Huang et al., 2021) examines CEO personality as perceived by others. In an experimental setting, the study examines how participants perceive CEOs’ confidence level that, in turn, affects participants’ decisions to invest in the firms. In the A&F literature, researchers have recently started using such experimental methods to examine CEO attributes, but experimental research is less common than in the management discipline and constitutes a smaller portion of the literature. In contrast, A&F researchers devote more attention to studying CEO overconfidence, which we attribute to the availability of the quantifiable empirical proxy for overconfidence developed by Malmendier and Tate (2005, 2008).

4.3.1.3.3 Management studies

In comparison, management researchers examine a wider and more nuanced range of personality traits, underpinned by psychology research (Benischke et al., 2019; Harrison et al., 2019), e.g. the five factors of personality (Herrmann and Nadkarni, 2014; Nadkarni and Herrmann, 2010). Personality traits such as conscientiousness, neuroticism, agreeableness, extraversion and openness can be difficult to assess through objective behavioral indicators based on publicly available information. Consequently, some researchers have administered surveys on executive officers to gauge their personality traits through self-reported psychometrics (Benischke et al., 2019). In contrast, others have used text analysis of publicly available CEO speeches to measure perceived CEO personality traits (Harrison et al., 2020; Malhotra et al., 2018).

Management researchers document significant impacts of CEO personality traits, such as extraversion, on stock volatility (Harrison et al., 2020) and M&As (Malhotra et al., 2018). Humble CEOs attract lower analyst expectations in earnings forecasts (Petrenko et al., 2019). Openness and agreeableness are linked to strategic dynamism and moderate the relationship between CEO overconfidence and firm risk-taking (Benischke et al., 2019). Because of relatively few studies on these more nuanced CEO personality traits, current research in this area has not yet reached maturity, with many research questions yet to be explored to provide a full picture of how these CEO personality traits affect firm policies.

4.3.2 CEO political ideology

4.3.2.1 Methodology and an overview of findings

We reviewed seven articles in both A&F and management on CEO political ideology. CEO ideology is frequently observed as a binary measure of conservatism versus liberalism, proxied by political donations to the Republican or Democratic parties, respectively. This approach is widely used by both A&F researchers (Di Giuli and Kostovetsky, 2014; Hutton et al., 2014) and management researchers (Bhandari and Golden, 2021; Chin et al., 2013; Chin and Semadeni, 2017; Graffin et al., 2020; Gupta et al., 2021). A&F researchers have also investigated the degree of partisanship of CEOs (Francis et al., 2016). Recent management research has undertaken a more nuanced and in-depth approach to investigating CEO ideology: Chin et al. (2021) propose separating social conservatism and economic conservatism, which have different impacts on CEO decision-making.

CEO political ideology influences a range of corporate policies, including financing decisions (Hutton et al., 2014), risky investments (Hutton et al., 2014), CSR engagement (Di Giuli and Kostovetsky, 2014), lobbying efforts (Unsal et al., 2016) and executive compensation (Chin and Semadeni, 2017), that ultimately impact firm performance and valuation (Di Giuli and Kostovetsky, 2014; Hutton et al., 2014; Unsal et al., 2016). Republican-leaning CEOs adopt more conservative financing and investing policies by choosing lower leverage, less risky investments, reduced R&D and capital expenditure (Hutton et al., 2014) and engage in fewer M&As (Elnahas and Kim, 2017). Consequently, firms led by Republican CEOs enjoy a higher credit rating (Bhandari and Golden, 2021) but have a lower level of innovation (Hutton et al., 2014).

Democrat- and Republican-leaning CEOs focus on different strategies to engage with external stakeholders. Democrat CEOs spend more financial resources on CSR and achieve higher CSR ratings (Chin et al., 2013; Di Giuli and Kostovetsky, 2014). Republican CEOs are less likely to pursue CSR but, instead, invest more resources in political lobbying, by incurring higher lobbying expenditure and sponsoring more bills than their Democrat counterparts (Unsal et al., 2016). CEO political ideology not only affects a firm’s own CSR-related decisions but also influences industry peers; Gupta et al. (2021) find that firms are more likely to enact a senior executive position dedicated to CSR if the position has been previously adopted by Republican CEOs at peer firms.

4.3.2.2 A&F studies

A&F researchers tend to focus on the impact of CEO political ideology on financial aspects of corporate decision-making, specifically investment, financing or financial reporting outcomes. Investment decisions examined include M&As (Elnahas and Kim, 2017) and R&D and capital expenditure (Hutton et al., 2014). Financing decisions and outcomes include the use of debt (Hutton et al., 2014) and the firm’s credit rating (Bhandari and Golden, 2021). A&F studies also investigate tax avoidance practices (Francis et al., 2016). The ultimate question of interest to A&F researchers is how CEO ideology impacts firm profitability and financial performance (Hutton et al., 2014; Lee et al., 2014; Unsal et al., 2016). Few researchers have examined CSR outcomes associated with CEO political ideology (Di Giuli and Kostovetsky, 2014).

4.3.2.3 Management studies

In contrast to the A&F literature that focuses on financial outcomes, the management literature devotes more attention to social and environmental outcomes (Chin et al., 2013; Gupta et al., 2021). Management researchers also study how CEO political ideology affects the internal processes of corporations, by examining executive compensation structure (Chin and Semadeni, 2017; Graffin et al., 2020) and entrepreneurship through cooperative strategic decision-making (Chin et al., 2021). Some investigation topics overlap between management and A&F researchers, e.g. tax avoidance (Christensen et al., 2015). Conflicting findings have been documented by A&F and management researchers. For example, a management study by Christensen et al. (2015) finds that Republican-leaning CEOs engage in less tax avoidance than their Democrat-leaning counterparts, whereas an A&F study by Francis et al. (2016) finds the opposite, Republican CEOs engage in more tax sheltering, while nonpartisan CEOs engage in less tax sheltering.

4.3.3 Hobbies and off-the-job conduct

4.3.3.1 Methodology and overview of findings

In reviewing the literature on CEOs hobbies and off-the-job conduct, we identified 10 papers in the A&F literature and one in management relevant to our study. A&F researchers use a variety of different proxies, based on observable CEO hobbies and personal behaviors, to capture specific CEO inherent traits or values that are otherwise difficult to observe. These traits and values include CEO integrity (Biggerstaff et al., 2015; Cline et al., 2018), materialism (Bushman et al., 2018; Davidson et al., 2015, 2018) and risk preferences (Cain and McKeon, 2016; Cronqvist et al., 2012; Sunder et al., 2017). For example, CEO integrity is measured by observing misconduct committed by CEOs in private or other corporate contexts, e.g. profiting from options backdating (Biggerstaff et al., 2015) and personal indiscretions (e.g. allegations of dishonesty, substance abuse, sexual misadventure or violence) (Davidson et al., 2015). CEO materialism (or frugality) is measured by observing CEOs’ ownership of luxury goods (i.e. vehicles, boats and real estate) (Bushman et al., 2018; Davidson et al., 2018). To capture CEOs’ personal risk preferences, researchers have adopted different approaches: some observe CEOs’ possession of a private pilot license as a proxy for personal risk tolerance (Cain and McKeon, 2016; Sunder et al., 2017), whereas others use CEOs’ personal leverage in their home mortgage to predict corporate leverage (Cronqvist et al., 2012).

4.3.3.2 A&F studies

CEOs’ personal interests and hobbies can manifest CEOs’ underlying values and personal traits that, in turn, impact corporate decision-making. Most outcomes examined concern some aspect of corporate risk, such as the risk of financial misreporting (Biggerstaff et al., 2015; Davidson et al., 2015) and lawsuits (Cline et al., 2018), debt and leverage (Cronqvist et al., 2012), risky investment through innovation (Sunder et al., 2017), the risk management process (Bushman et al., 2018) and stock return volatility (Cain and McKeon, 2016). Researchers have also examined CSR (Davidson et al., 2018).

A&F researchers document behavioral consistencies between individual CEOs’ personal conduct and their firms. For example, CEOs accused of unethical personal conduct are more likely to pursue value-destroying acquisitions (Biggerstaff et al., 2015) and commit corporate misconduct such as financial misreporting (Biggerstaff et al., 2015; Davidson et al., 2015), resulting in higher exposure to litigation (Cline et al., 2018). Materialistic CEOs who own luxury personal assets engage in less CSR (Davidson et al., 2018). In the context of risk-taking, CEOs who have high personal leverage in home mortgages also take out more debt with their firm (Cronqvist et al., 2012). CEOs who are more inherently risk-tolerant, as evidenced by their hobby as a private pilot, tend to engage in more corporate risk-taking (Cain and McKeon, 2016) and innovation (Sunder et al., 2017). For CSR, firms managed by married CEOs have a higher score on diversity and employee relationships (Hegde and Mishra, 2019) and the overall CSR rating is higher for CEOs who have daughters (Cronqvist and Yu, 2017). Collectively, this body of evidence shows that CEOs’ off-the-job and personal values reflect their underlying traits and significantly impact corporate policies and outcomes.

4.3.3.3 Management studies

Though most research on CEO hobbies and personal behavior was conducted by A&F rather than management researchers, the key difference between A&F and management research is that A&F studies are more interested ascertaining whether a relationship exists between CEOs’ personal and specific corporate outcomes. To that end, A&F researchers have devoted much attention to, and made significant methodological advances in, operationalizing innovative empirical proxies based on observable CEO hobbies or personal conduct, to capture inherent CEO personal values and traits that are otherwise unobservable. In contrast, management researchers are more interested in understanding the underlying mechanism of how CEOs’ personal values or traits affect firm decisions and outcomes, rather than in ascertaining the existence of such relationships. König et al. (2020) examined CEO empathy and firms’ crisis responses from a theoretical perspective, formulating a U-shaped relationship between empathetic CEOs and the effectiveness of firms’ crisis management.

4.3.4 Status

4.3.4.1 Methodology and overview of findings

CEO status has attracted researcher attention. There are 2 papers in A&F and 3 in management in the review. A&F researchers tend to focus on the external status of CEOs, as proxied by winning prestigious business awards (Malmendier and Tate, 2009), and possessing a royal title of knighthood or damehood (Raff and Siming, 2019). In contrast, in management research, in addition to focusing on external CEO celebrity status (Lovelace et al., 2018), management researchers tend to also focus on CEO internal status within corporations (Hayward et al., 2004). While A&F research tends to be empirical and focus more on measuring CEO status (Malmendier and Tate, 2009; Raff and Siming, 2019), management research on CEO status is balanced between theoretical research (Hayward et al., 2004; Lovelace et al., 2018) and empirical studies (Shi et al., 2017). Both A&F and management researchers have examined how CEOs’ pursuit of celebrity (rather than its attainment) can potentially affect corporate policies (Raff and Siming, 2019; Shi et al., 2017).

4.3.4.2 A&F studies

A&F studies examine how CEOs’ external social status affects their firm’s financial performance (Malmendier and Tate, 2009; Raff and Siming, 2019). The researchers examine how award-winning affects CEOs’ corporate decisions, such as earnings management (Malmendier and Tate, 2009) and hiring/employment decisions (Raff and Siming, 2019). The evidence generally shows that attainment of social status by CEOs is detrimental to firms’ financial performance (Malmendier and Tate, 2009; Raff and Siming, 2019). For example, CEOs who attain “superstar” status conferred by winning prestigious business awards subsequently underperform, despite receiving higher executive compensation; the risk of earnings management also increases (Malmendier and Tate, 2009).

4.3.4.3 Management studies

In contrast to A&F research that uses business or government awards as proxies for CEO status, management researchers tend to focus on press coverage and media portrayal (Hayward et al., 2004; Lovelace et al., 2018). In addition, management researchers are interested in the underlying mechanisms of how CEO celebrity, and the pursuit thereof, affects CEOs’ decision-making (Hayward et al., 2004; Lovelace et al., 2018; Shi et al., 2017). For example, Shi et al. (2017) show that CEOs whose competitors have won awards engage in more intensive acquisitions, particularly when the focal CEOs themselves have a high likelihood of winning an award. Finally, management researchers also examine the boundary conditions that moderate the relationship between CEO status and firm policies (Lovelace et al., 2018).

5. Directions for future research

Our review identifies a number of potential directions for future research. Specifically, we advocate a greater integration of CEO attributes research between different disciplines, a more holistic approach by examining interactions among various CEO individual characteristics and extending the investigation of boundary conditions that magnify or moderate the impact of CEO idiosyncrasies on firm policies and performance.

5.1 Interdisciplinary integration

Cross-disciplinary silos have naturally emerged in the CEO literature, creating unnecessary chasms separating A&F and management research. Interdisciplinary divides exist both in the theoretical development of research questions and in empirical methodology and execution. From a theoretical perspective, A&F researchers show a stronger interest in corporate outcomes related to financial performance, such as firm valuation, profitability and investment outcomes (e.g. Ham et al., 2018; Hutton et al., 2014; Malmendier and Tate, 2008; Unsal et al., 2016). In contrast, management researchers are more often interested in non-financial outcomes, such as social and environmental responsibility (e.g. Chin et al., 2013; Kim et al., 2018; Petrenko et al., 2016). Management researchers also devote more attention to understanding the internal processes leading to particular corporate decisions, in addition to the decisions per se (e.g. Chen et al., 2015; Chin et al., 2021; Graffin et al., 2020; Schumacher et al., 2020).

We propose a new integrated theoretical framework from these two bodies of research to consolidate our understanding on how CEOs affect firms’ success. Under this theoretical framework, we posit that CEOs’ impact on specific corporate policies (e.g. investment choices, financing decisions, corporate misconduct) constitute mechanisms through which CEOs’ influence eventually affects firm financial performance and success. Therefore, viewing these different fragmented corporate policy outcomes (i.e. dependent variables) through an integrated, consequential lens can provide insights into how CEO attributes permeate various aspects of corporate decision-making, all of which, in turn, impact firm performance. This integrated theoretical framework will help future management researchers, when examining specific corporate policies and processes, to go one step further to investigate whether and how such differences in policies translate into financial success for firms. Conversely, A&F researchers can benefit from this integrated framework by devoting more attention to the specific channels that enable CEOs’ idiosyncrasies to play a role in determining corporate financial performance.

From a methodological perspective, researchers from different disciplines can benefit from greater awareness and adoption of the empirical proxies and methodologies from one another. Neely et al. (2020) point out that one key methodological critique of upper echelons theory research is the incongruence of empirical measures used by researchers, which is more pronounced in an interdisciplinary context. In the literature, methodological divides along discipline boundaries have developed over time, historically arising from differences in the prevailing theoretical underpinnings and common research methods within each discipline. For example, in investigating CEO personality traits, A&F studies primarily focus on CEO overconfidence, by using an empirical proxy based on secondary data obtained from public records (e.g. Gervais et al., 2011; Hirshleifer et al., 2012; Malmendier and Tate, 2005, 2008). In contrast, management researchers more often branch out to other personality traits, such as narcissism and the five factors of personality derived from psychology theory (e.g. Chatterjee and Hambrick, 2007, 2011; Harrison et al., 2019; Herrmann and Nadkarni, 2014), as well as using primary data (such as executive surveys) to gauge CEO personality (e.g. Li and Tang, 2010; Wales et al., 2013). CEO literature can be advanced by integrating the existing methodological approaches from different disciplines. Such an integration will open new possibilities for researchers by providing access to new methodological tools and data. This will allow comparisons of results that are generated using different proxies side by side, by using the same samples, to achieve a broader integration and more in-depth reconciliation of the empirical evidence.

5.2 Interactions among CEO characteristics

CEOs, as individuals, embody a myriad of attributes along many different dimensions (e.g. age, gender, education, experience, personality). However, existing research on CEO attributes has primarily focused on the examination of a single CEO characteristic in each study. Consequently, we advocate a multifaceted approach for future researchers to undertake a more holistic approach when studying CEO attributes to gain a more in-depth understanding of how the combined characteristics of CEOs affect firm policies and outcomes.

Specifically, it will be worthwhile for future researchers to devote more attention to exploring the interactions among various personal characteristics that together comprise a CEO’s identity. Different CEO characteristics may have additive, reductive or multiplicative effects when interacting with one another. Some personal characteristics can affect CEO decision-making in the same direction, potentially giving rise to a compounding effect that has not so far been investigated in the literature. For example, politically conservative CEOs and older CEOs both engage in less financial risk-taking (Hutton et al., 2014; Serfling, 2014). Therefore, CEOs who are both older age and politically conservative would be expected to exhibit stronger risk-aversion. It would be beneficial if future researchers were to explore whether such additive or compounding effects exist.

In contrast, certain aspects of CEO idiosyncrasies may exert conflicting influences on CEO decisions, leading to a reductive or offsetting effect. For example, younger CEOs are more risk-taking, whereas female CEOs are documented as less risk-taking (Huang and Kisgen, 2013; Serfling, 2014). Consequently, an interesting question arises whether age or gender has the dominant effect in determining CEO risk-taking, as well as the extent to which these competing factors neutralize the other’s influence. In such a context, undertaking a more holistic approach by viewing CEOs as complex individuals who embody many different characteristics would yield a more in-depth understanding of the impact of CEOs on firm policies and performance.

Third, a holistic examination of CEO attributes requires more than merely controlling for more CEO characteristics and also exploring the moderating effects that some attributes may have on others, which we term “multiplicative” effects. Some CEO attributes are expected to serve as moderators that strengthen or weaken the influence of other CEO characteristics on decision-making. For instance, outsider CEOs are associated with negative firm performance (Shen and Cannella, 2002; Zhang and Rajagopalan, 2004) and lower innovation (Cummings and Knott, 2018), whereas CEO education has been shown to affect CEOs’ cognitive complexity and innovation (Finkelstein et al., 2009), leading to more aggressive corporate policies and superior firm performance (Bertrand and Schoar, 2003; King et al., 2016). Therefore, it would be worthwhile to explore whether CEO education reduces the effect of being an externally appointed CEO. Overall, future research can benefit from adopting a broader, multifaceted perspective to examine various CEO individual characteristics, as well as a more nuanced approach to explore the interactions among CEO personal attributes, to provide a more holistic body of evidence on the impacts of CEOs’ characteristics.

Finally, from a methodological point of view, expanding the scope of investigations may require researchers to view CEOs through a more multifaceted lens, rather than a single-focus lens. For example, existing research examining capital market reactions to new CEO announcements (e.g. Brinkhuis and Scholtens, 2018; Cook and Glass, 2011) reports that if the newly appointed CEO is female, then researchers tend to emphasize gender as the main driver of stock price reactions to the exclusion of other CEO characteristics, whereas only few researchers take into account other relevant factors such as CEO career pathway (Lee and James, 2007). This single-focus lens is not unique to academic research; it is also reflected more widely in the popular press. For example, Lee and James (2007) report that news coverage of CEO appointments tends to feature more gender-related descriptors if the CEOs are female, than if male. We therefore encourage future researchers to broaden their focus beyond a single CEO characteristic (such as gender) to encompass a wider range of personal attributes that form a part of the CEOs’ human capital, such as education (Miller et al., 2015; Muller-Kahle and Schiehll, 2013), career pathway and experience (Chen et al., 2021; Custódio et al., 2019; Mishra, 2014). Undertaking a more open methodological approach by expanding the breadth of data collection and research design will support the aforementioned multifaceted theoretical outlook to provide a more comprehensive picture of the impacts of CEOs on the firms that they lead.

5.3 Boundary conditions that moderate the impact of CEO attributes

Though CEOs have considerable decision-making power in the day-to-day operations of corporations, in many areas of major corporate decisions such as M&As, board approval is needed to authorize and operationalize the initiatives. Existing evidence shows that corporate governance quality, such as monitoring by boards and audit committees, can mitigate the impacts of a CEO’s personal characteristics (e.g. García-Meca et al., 2021; Jenter and Lewellen, 2015). In addition, the impact of CEO attributes on firm outcomes is weakened by the presence of strong board monitoring (Jenter and Lewellen, 2015). Board attributes such as experience (Huang et al., 2014; Kang et al., 2018; Wen et al., 2020), gender diversity (Chen et al., 2017; Gul et al., 2011; Levi et al., 2014) and age (Goergen et al., 2015) have been found to impact firm decisions. This implies that corporate boards and other governance mechanisms are expected to ameliorate CEOs’ personal preferences, which can ultimately impact corporate policies. Therefore, it is important that empirical studies consider the role of corporate governance in moderating the effects of CEOs.

However, though some studies have examined the moderating role of governance quality such as independent directors, G-index, E-index, board size and institutional ownership in controlling the impact of CEO idiosyncrasies (e.g. Ding et al., 2021; Kong et al., 2021; Law and Mills, 2017; Yonker, 2017), many prior studies did not control for corporate governance quality and board attributes in their empirical design. For example, only a small number of empirical studies on CEO overconfidence examine the internal and external circumstances that exacerbate or reduce a CEO’s personality (Li and Tang, 2010). Boundary conditions such as industry environment and firm-specific factors contribute to determining the extent to which CEO overconfidence affects corporate policies (Li and Tang, 2010) and whether overconfident CEOs can outperform their non-overconfident peers (Hirshleifer et al., 2012; Hsu et al., 2017). For example, conservative accounting practices help hold overconfident managers accountable for their investments by forcing them to acknowledge problems on a timely basis; therefore, overconfident CEOs have better cash flow performance when their firms have adopted accounting conservatism (Hsu et al., 2017). Other firm-level factors, such as CEO–chair duality, also moderate the impacts of CEO overconfidence on firm risk-taking (Li and Tang, 2010). In the context of internal appointment of CEOs, overconfident and narcissistic executives are more likely to be promoted to the CEO (Rovelli and Curnis, 2021). In light of this evidence, we encourage future researchers to devote more attention to investigating these boundary conditions that can magnify or moderate the impacts of CEO attributes.

5.4 Research settings

Most studies in the review (77%) focus on US companies. Few studies consider companies in other countries (e.g. Campbell et al., 2019; Goergen et al., 2015; Zhu et al., 2020) or are cross-country studies (e.g. Brinkhuis and Scholtens, 2018; Faccio et al., 2016; Hanousek et al., 2019). However, different national systems such as culture, ownership and governance structure could moderate the effects of CEOs on firm outcomes (Crossland and Hambrick, 2007). We encourage future researchers to consider more cross-country studies to provide greater insights into how CEO attributes impact firm outcomes.

Although some studies find systematic differences when comparing innovation intense industries (e.g. Dezsö and Ross, 2012), capital- and labor-intense industries (Hanousek et al., 2019) and firm degree of diversification (Andreou et al., 2017), researchers should look into other facets of the industrial setting. For instance, given prior evidence that female CEOs take less risk than their male counterparts, it would be interesting to investigate whether this holds for all industries since some industries (e.g. high-tech firms) are inherently more risk-taking than others. Different firm types, such as private firms (e.g. Belenzon et al., 2019; Herrmann and Nadkarni, 2014; Nadkarni and Herrmann, 2010), subsidiary firms, firms operating in various different life cycle stages, also need to be investigated. For instance, Custódio and Metzger (2014) find that CEOs with finance experience are more likely to be hired by mature firms. This is because managerial financial competence may be more beneficial to a large, established firm in a declining industry with a widely distributed shareholder base, but a young and fast-growing firm with a large institutional ownership base may benefit more from managerial industry experience. According to Bragaw and Misangyi (2017), past CEO experience earned in a private firm has a greater negative impact on shareholder returns than prior experience in a public firm. All these situations present opportunities for further investigation into whether there are differential impacts of CEO attributes on corporate decision-making in different research settings.

6. Conclusion

We have reviewed A&F and management studies that examine the impacts of CEO attributes on corporate policies and firm outcomes. Our review shows a significant growth in academic research that has investigated the relationship between a wide range of CEOs’ personal attributes and a diverse spectrum of corporate policies and outcomes. Based on our findings, we provide directions for future research and encourage researchers to adopt a greater interdisciplinary integration between A&F and management research, a more holistic approach in examining CEOs as complex individuals who embody myriad characteristics and expanding investigations into the boundary conditions that moderate the link between CEOs and corporate decision-making.

This review makes three important contributions to the literature examining CEOs’ characteristics and corporate outcomes. First, this study bridges the interdisciplinary fault-lines by being the first to review A&F studies and management studies together, thereby offering a novel and integrated knowledge set by drawing insights from these overlapping bodies of research. Most prior reviews of CEO research are in-depth in nature but relatively narrow in scope because they focus on a single aspect of the CEO, such as narcissism (Cragun et al., 2020), CEO–chair duality (Krause et al., 2014) or CEO–TMT interactions (Georgakakis et al., 2019) or alternatively, examine only one specific aspect of firm outcome such as innovation (Cortes and Herrmann, 2021). Our review enables researchers to access a broader range of theories and methodologies by transcending interdisciplinary barriers, thereby benefiting future upper echelon–related and CEO-related research.

Second, we offer a novel theoretical framework to consolidate the existing fragmented research questions concerning the impacts of CEO attributes on various corporate policies and outcomes. Under the configurational perspective, Busenbark et al. (2016) call for research into the impacts of CEO on firm performance as a key area of investigation. Our theoretical framework advances this body of research by synthesizing prior evidence on a wide array of specific corporate policies linked to CEO personal attributes – it is through influencing these specific firm policies relating to investment, financing and corporate misconduct that CEOs can affect overall firm performance. Therefore, our study makes an important theoretical contribution by enabling more in-depth understanding into the mechanisms through which CEOs’ personal traits can determine corporate success. This integrated framework consolidates the existing fragmented empirical findings on various corporate outcomes into a holistic and interconnected body of evidence on how individual CEOs affect their firm.

Third, in light of the existing critique of upper echelons research for its incongruent use of measures and proxies (Neely et al., 2020), we provide insights into the discrepancies in the methodologies used by A&F and management researchers. Understanding such cross-disciplinary differences will enable future researchers to broaden their horizon and benefit from the methodological insights from research beyond their own discipline.

Figures

Figure 1

Articles included in review by year of publication 2000–2021

Figure 2

Theoretical framework: CEO attributes and corporate outcomes

Table 1

List of journals in the review

Accounting, finance and economics	No of articles	Management (MGT)	No of articles
The Accounting Review	9	Academy of Management Journal	21
Contemporary Accounting Research	4	Academy of Management Review	6
Corporate Governance: International Review	5	Administrative Science Quarterly	9
Journal of Accounting and Economics	2	British Journal of Management	2
Journal of Accounting Research	1	Human Resource Management	5
Journal of Corporate Finance	43	Human Resource Management Journal	1
Journal of Economic Perspectives	2	Journal of Management	8
Journal of Finance	10	Journal of Management Studies	5
Journal of Financial and Quantitative Analysis	10	Journal of the Academy of Marketing Science	1
Journal of Financial Economics	21	Journal of World Business	1
Journal of Financial Intermediation	2	Leadership Quarterly	8
Quarterly Journal of Economics	2	Management Science	6
Review of Accounting Studies	3	Strategic Management Journal	37
Review of Finance	1	Tourism Management	2
Review of Financial Studies	5
Total number of articles	120		112

Source(s): Authors’ own creation

Table 2

Summary statistics of sample

	No. of papers	Percentage of sample
Research method
Quantitative (archival data)	197	84.9
Quantitative (survey data)	15	6.5
Qualitative	1	0.4
Conceptual	14	6.0
Experiment (empirical)	4	1.7
Meta-analysis	1	0.4
Total	232	100
Geography
Unites States	181	78.0
China	14	6.0
Cross-country	8	3.4
Other single countries	14	6.0
n/a	15	6.5
Total	232	100
Research themes
CEO demographic and experience	107	46.1
CEO network	34	14.7
CEO underlying attributes	91	39.2
Total	232	100

Source(s): Authors’ own creation

Table 3

CEO attributes and impact on firm outcomes: theoretical mechanisms

Theme	Theories used		Main research insights	Example of studies
	A&F	MGT
CEO demographic attributes - Intrinsic	Upper echelons, agency, career concerns/horizon, risk aversion, imprinting, home bias, cognitive, leadership, social and place identity, place of attachment	Upper echelons, agency, legacy conservation, glass cliff, prospect, regulatory focus, career horizon, human capital, post traumatic growth, evolutionary, imprinting, social class, life history, strategic choice, resource dependency, gender role stereotyping, legitimacy, status characteristics, token, role congruity, socioemotional wealth, evolutionary theory, life history, intergroup relation	- Older CEOs are more conservative in their corporate polices and take less risk than younger CEOs because older CEOs may lack mental and physical stamina, as well as the ability to acquire new concepts and learn new behaviors. CEOs near retirement are more likely to take short-term decisions - Younger CEOs are more likely to make investment decisions that demonstrate their ability to the labor market. The agency problem associated with some of these investment decisions younger CEOs make is that not all the investments benefit shareholders - Appointment of female CEOs receives more negative market’s reaction than male CEOs and that female CEOs are more likely to be appointed in firms that are in a precarious financial position - CEO’s familiarity with their place of birth provides information advantage which increases their home bias investment - CEO traumatic experience in their early life has impact on their firm’s strategic risk	Yim (2013) Lee and James (2007) Jiang et al. (2019) Serfling (2014),Kalyta (2009) Kish-Gephart and Campbell (2015)
- Acquired	Upper echelons, human capital, resource dependency, agency, information advantage, entrenchment, legitimacy, risk aversion, social network, familiarity bias	Upper echelons, resource dependency, capability, human capital, risk aversion, learning transfer, information asymmetry, leadership, experiential learning, stakeholder-centric	- The accumulated stocks of education, skills and experience of CEOs are a critical resource for a firm's strategic decisions - CEO’s international experience provides their firms with foreign knowledge and networks which are valuable for international diversification - CEOs who are promoted within the firm are more likely to be committed to the status quo - CEOs with functional experience are more adept at addressing difficulties in relevant functional areas	Custódio and Metzger (2013) Benmelech and Frydman (2015) Crossland et al. (2014) Li and Patel (2019)
CEO interactions with others	Upper echelons, agency, resource dependency, social network, risk aversion, role theory, managerial power, managerial hegemony	Upper echelons, social learning, impression theory, social class theory, homophily, resource dependency, agency, embeddedness, risk aversion, self-categorization theory, social support, social identification, attention based view, legitimacy, social network, social embeddedness	- Through their social networks, CEOs can obtain relevant information and access to precious resources that can impact firm performance - CEO social networks could be used as channels for managerial opportunism and entrenchment	Fracassi and Tate (2012) Chen et al. (2021), Geletkanycz and Boyd (2011)
Underlying attributes	Upper echelons, behavioral consistency, social identity, hubris, overconfidence, agency, cognitive dissonance, ethical theories	Upper echelons, social identity, leadership, psychology, personality, behavioral decision, behavioral agency, agency, bounded rationality, procedural rationality theories	- Overconfident CEOs overestimate their ability to achieve their goals, which increases their risk-taking behavior, and could take decisions that are potentially value-destroying - CEOs of conservative political ideologies, such as being Republican-leaning, are also more likely to adopt conservative corporate policies - CEOs who espouse certain values in their personal life, such as risk tolerance (e.g. willingness to take on high debt leverage) or materialism, consistently adopt similar policies in their corporate decision-making	Malmendier and Tate (2005), Li and Tang (2010), Cronqvist et al. (2012), Hutton et al. (2014), Gupta et al. (2019), Benischke et al. (2019)

Source(s): Authors’ own creation

Notes

1. For example, we build on the literature review on CEO narcissism research by Cragun et al. (2020) that focuses primarily on management research, by placing that review in the interdisciplinary context of the A&F literature, which examined a similar yet different facet of CEO overconfidence. In doing so, we tackle one key methodological critique of upper echelons theory research (Neely et al., 2020) on the incongruence of empirical measures adopted by researchers from different fields, by directly documenting the importance of empirical proxies of CEO personality traits on corporate outcomes. Specifically, we find that even though narcissism and overconfidence are similar personality traits from a conceptual perspective, their vastly different empirical measurement, popularized by finance and management research, respectively, result in different, and sometimes opposing, findings on the impacts of CEO overconfidence versus narcissism on firm policies (e.g. in the context of influencing firms’ corporate social responsibility performance).

2. Like upper echelons theory, leadership theory posits that individual leaders’ personal styles make a difference to organizational management and outcomes (Cragun et al., 2020; Hoffman et al., 2011).

3. Other studies such as Core and Guay (1999) and Coles et al. (2006) focus on CEO compensation and firm performance, but they are outside the scope of our review.

4. For consistency, we will use the term “overconfidence” (in lieu of “hubris” or “optimism”) when reviewing prior work in this section.

5. This proxy is constructed by identifying CEOs who are characterized in press articles as “confident” or “optimistic” versus “reliable,” “cautious,” “conservative,” “practical,” “frugal” or “steady.”

Conflict of interest: The authors declare no conflict of interest.