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Do narcissistic CEOs rock the boat?

Tom Aabo (Aarhus University, Aarhus, Denmark)
Frederik Hoejland (QVARTZ, Copenhagen, Denmark)
Jesper Pedersen (Clearwater International Corporate Finance, Aarhus, Denmark)

Review of Behavioral Finance

ISSN: 1940-5979

Article publication date: 17 April 2020

Issue publication date: 27 April 2021




The purpose of this paper is to investigate the role of narcissistic supply for the association between CEO narcissism and corporate risk taking.


The authors investigate a sample of 281 non-financial S&P 1500 firms and a corresponding 457 CEOs in the 10-yr period 2006–2015.


The association between CEO narcissism and corporate risk taking depends on the admiration, attention, and affirmation of own superiority (“narcissistic supply”) that the CEO receives given her/his current position. Thus, a narcissistic CEO with an insufficient narcissistic supply (small firm/small compensation) will crave for more and take more risks (“rock the boat”) while a narcissistic CEO with a sufficient narcissistic supply (large firm/large compensation) will protect the status quo and be reluctant to take new risks. Specifically, the authors find that a change from a slightly narcissistic CEO to a strongly narcissistic CEO, for positions entailing limited (abundant) narcissistic supply, is associated with an increase (a decrease) in corporate risk of 6%–8% (11%–27%).


Previous research indicates a positive association between CEO narcissism and corporate risk taking in specific domains such as M&A and R&D activities. This paper provides a novel contribution to the existing literature by identifying and assessing the important role of narcissistic supply for the association between CEO narcissism and corporate risk taking in general.



We thank Dennis Albæk, Gennaro Bernile, Daniel Bradley, Nicklas Bang Eriksen, Arman Eshraghi, Johan Durup Fritzemeier, Sondre Oekstad Gjeldnes, Berit Hansen, Alain Krapl, Rasmus Laursen, Cecilie Lippe, Stig Vinther Moeller, Maurizio Montone, Mads Oestergaard, Christos Pantzalis, Jung Chul Park, Martina Pejic, Kristoffer Houmann Poulsen, Jianping Qi, Anders Bjerre Therkildsen, Frederik Villumsen, Jared Williams, Yuhao Zhu, conference participants at the 2018 Behavioral Finance Working Group Conference, and seminar participants at Aarhus University, Copenhagen Business School, and University of South Florida for helpful comments and suggestions. We bear sole responsibility for all remaining errors and omissions.


Aabo, T., Hoejland, F. and Pedersen, J. (2021), "Do narcissistic CEOs rock the boat?", Review of Behavioral Finance, Vol. 13 No. 2, pp. 141-164.



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