Abstract:

Over the past two decades, there has been a gradual transformation in how the corporate sector globally approaches reporting practices. In addition to conventional financial statements, there is a growing focus on qualitative reporting, specifically addressing issues related sustainability. Firms are increasingly taking a more assertive approach in addressing sustainability issues. This study seeks to examine effect of Chief Executive Officer narcissism (CEON) on corporates’ Environmental Social Governance disclosure (ESGD) and Financial Performance (FP). The study relies partly on hand-collected visual data pertaining to the narcissism variable and archival data on ESGD sourced from Bloomberg database of public listed companies on PSX over 12 years starting from 2011. Generalized method of moments (GMM) applied to estimate the result of proposed models. The finding reveals that CEON has a negative effect on corporates’ ESGD and FP. Further, analysis indicates that CEON produced consistent effect on each constituent of ESGD (i.e. ED, SD, GD) and ESGD also produce reverse causality relationship with CEON.  Thus, findings confirmed the postulates made by the upper echelons’ theory of management, organizational activities and outcomes are the reelection of its top-management. This may be attributed as Pakistan is facing concentrated ownership structure among the businesses. Concentrated ownership structure with an effective and close monitoring mechanism has stronger incentive to regulate the CEO at their own will which may resulted in outweigh the narcissistic behavior of the CEO. In hand study contributes by highlighting the need for targeted interventions and reforms to promote sustainable and responsible business practices. It also offers insightful implications for practitioners, regulators i.e. SECP, academic universe and policy makers in general and businesses in particular while formulating policy and regulatory framework in respect of businesses and its environment.

Keywords: CEO Narcissism, Environmental, Social, Governance, Disclosure, Firm Performance