Research reveals that the more confident a chief executive is, “the less their firm invests in activity that has a positive impact on society”.
Overconfident CEOs tend to signify less corporate social responsibility in a company, our research shows. The more confident the CEO, the less their firm invests in activity that has a positive impact on society.
We looked at 2,138 firms with 3,478 different CEOs from US-exchange-listed firms across all industry sectors, and calculated overconfidence by measuring executive compensation. We looked at the share options provided to CEOs: if the CEO fails to exercise these options (selling them off) it means they are overconfident about their company
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