Narcissus Enters the Courtroom: CEO Narcissism and Fraud

http://eds.b.ebscohost.com.libproxy.smu.edu.sg/eds/pdfviewer/pdfviewer?sid=68eff40e-c507-4a31-80e2-5d1f824f0b67%40sessionmgr111&vid=1&hid=127

Posted by M Laavanya, Year 3 undergrad at the School of Accountancy, Singapore Management University

Narcissus Enters the Courtroom: CEO Narcissism and Fraud.

Rijsenbilt, Antoinette1 rijsenbilt@ese.eur.nl Commandeur, Harry2

Journal of Business Ethics. Oct2013, Vol. 117 Issue 2, p413-429. 17p. 8 Charts.

Abstract:

This study explores the aspects of the relationship between possible indicators of CEO narcissism and fraud. Highly narcissistic CEOs undertake challenging or bold actions to obtain frequent praise and admiration. The pursuit of narcissistic supply may result in a stronger likelihood of a CEO to undertake bold actions with potential detrimental consequences for the organization. The sample consists of all S&P 500 CEOs from 1992 till 2008 with more than 3 years of tenure. The measurement of CEO narcissism is based on 15 objective indicators and fits the main conceptualization of narcissism. This data collection provides a score for all S&P 500 CEOs according to their narcissistic tendencies. The Accounting and Auditing Enforcement Releases on the SEC’s website are the indicators of managerial fraud. The findings confirm the expected influence of plausible proxies for CEO narcissism on fraud by showing a positive relationship. This confirms the psychologic perspective of CEO narcissism as a potential cause of fraud.

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