NEW DELHI: Narcissism, a much-reviled personality disorder, inspired by the Greek myth of Narcissus, can help the board of directors take bigger risks for the company in a positive manner, according to a study.
The study, published in the Strategic Management Journal narcissistic CEOs can allocate more resources toward risk-taking strategies.
While taking bigger risks for bigger gains is something synonymous with the gambling world, evidently it can be used by CEOs with a high level of narcissism to steer their company ahead of the curve.
A team of researchers from the universities of Central Arkansas, Wyoming, Alabama, and Nebraska-Lincoln set out to find if there was any actual substance to this idea, basing it on board meeting transcripts from 88 public firms and 197 CEOs over 20 years.
The narcissism of the CEO was based on his public image and his pay.
The study found two ways CEOs could use the reviled personality trait for their companies and board meetings. The first would be stacking the deck principle, meaning that the CEO could choose directors who had similar temperaments to him, which means that the CEO would be met by a unanimous, positive response whenever they presented an idea.
Or they could go the demagogue way, using an emotional connection like politicians to stir up an excitable response, again helping their ideas get implemented.
The study also acknowledges that the narcissist personality can lead to misuse of power and manipulation.
"Boards need to be careful of when and when they don't have duality; when they do and don't give CEOs the title of board chair, " said Cameron J. Borgholthaus from the University of Wyoming, US.