David H. Zhu, Guoli Chen
This study examines how narcissistic CEOs may use social inference processes to reduce social uncertainty in new director selections. Our theory of social inference explains why a powerful CEO may favor new directors who previously worked as outside directors on other boards where CEOs are similarly narcissistic as the focal CEO. We further suggest that the powerful CEO is especially likely to use such social inference processes when the focal firm¡- s performance is low. Moreover, we explain why new directors who previously worked with more narcissistic CEOs on other boards may provide subsequent feedback to the focal CEO that encourages the CEO to exhibit a stronger narcissistic tendency. Results based on longitudinal analyses of Fortune companies¡- new director selections and CEO narcissism provided strong support to our theory.
Arizona State University, Tempe, AZ 85287, PO BOX 874006, United States; INSEAD, Singapore
