The Effect of CEO Narcissism on the Quality of Environmental, Social, and Governance Reporting—Evidence From Listed German Companies

ABSTRACT

This study explores how CEO narcissism—a salient individual trait within the upper echelons of corporate leadership—shapes the quality of environmental, social, and governance (ESG) reporting in large German firms. Drawing on data from 109 DAX, MDAX, and SDAX companies between 2017 and 2021 (545 firm‐year observations), we find that narcissistic CEOs tend to produce more elaborate and visually appealing ESG disclosures. However, their reporting behavior is selective: while they amplify social achievements and symbolic messaging, governance reporting quality remains largely unaffected, consistent with institutional constraints. Notably, we find that environmental performance fully mediates the relationship between CEO narcissism and the quality of environmental disclosures, suggesting that narcissistic executives may pursue substantive action to enhance their visibility. Our findings contribute to the upper echelons literature by illustrating how CEO personality traits influence strategic communication practices in a non‐Anglo‐Saxon institutional context. More broadly, the study advances the distinction between ESG reporting quantity and quality and offers a validated unobtrusive proxy—signature size—for executive narcissism. The results have implications for scholars, regulators, and stakeholders seeking to better understand how managerial traits affect corporate responses to sustainability challenges.