Consequences of other relevant concepts

Benefits of a quiet ego

Wellbeing

Researchers have recently developed a concept that is a quiet ego—a concept that overlaps with humility. Like humble individuals, people who experience a quiet ego are aware of their attributes rather than defensive, feel a sense of belonging or affiliation with all humans rather than special, appreciate the perspectives of other people, fostering compassion, and strive to develop and learn from their experiences rather than demonstrate their capabilities (Wayment et al., 2015). To measure a quiet ego, participants complete measures of these qualities, specifically detached awareness, inclusive identity, perspective taking, and growth-mindedness. This quiet ego has been shown to predict many favourable outcomes, such as happiness and wellbeing.

To illustrate, in one study, conducted by Bauer and Weatherbie (2023), 307 college students in America completed a series of measures online including

the quiet ego scale,
the satisfaction with life scale (e.g., Diener et al., 1985), comprising items like “If I could live my life over, I would change almost nothing”,
the scale of positive and negative experience (Diener et al., 2010), designed to assess the degree to which individuals experienced positive affect and negative affect during the last month,
the multidimensional scale of psychological well-being (Ryff & Keyes, 1995), designed to measure purpose in life, personal growth, autonomy, environmental mastery, positive relationships, and self-acceptance,
the growth motivation index (Bauer et al., 2015), constructed to gauge the degree to which individuals feel inspired to grow from diverse experiences, such as “I try to form my personal goals in life around my deeper interests”, and grow from reflection, such as “I ask my friends what they think and feel about current issues so that I can understand other points of view”,
the Loyola Generativity Scale (McAdams & de St. Aubin, 1992), developed to assess the degree to which individuals feel they have contributed to future society, such as “I feel as though I have made a difference to many people”.

As a series of multiple regression analyses revealed (Bauer & Weatherbie, 2023), quiet ego was positively associated with

subjective wellbeing—an index that combines satisfaction with life, high positive affect, and low negative affect,
psychological well-being—an index that combines purpose in life, personal growth, autonomy, and the other subscales of this measure, and
the motivation of individuals to grow from experiences and reflection as well as generativity—or a feeling they have contributed to society.

Qualities that foster wellbeing: mindfulness and emotional intelligence

Many studies have explored the reasons that a quiet ego tends to improve wellbeing. For example, as Liu et al. (2021) revealed, a quiet ego tends to foster mindfulness and improve emotional intelligence enhancing wellbeing and diminishing stress. Specifically, when individuals experience a quiet ego, they can observe themselves from the perspective of someone else, objectively and fairly, called detached awareness. Because of this detachment, they do not feel concerned about how their circumstances or surroundings reflect or affect their status or attributes. They can thus observe these circumstances or surroundings, impartially and without judgment, epitomising mindfulness.

Similarly, a quiet ego, coupled with mindfulness, can foster emotional intelligence—or the capacity of individuals to recognise, utilise, apply, and manage emotions helpfully. To illustrate,

if individuals adopt a quiet ego and thus appreciate the perspectives of other people, they can more readily imagine, decipher, and accommodate the emotions these people experience,
likewise, if individuals are mindful, they can observe themselves and other people, and hence appraise their emotions, more accurately.

This emotional intelligence enables people to resolve challenges, such as conflicts with other individuals, more effectively, enhancing wellbeing and diminishing stress. A survey of 300 participants that included measures of a quiet ego, mindfulness, emotional intelligence, life satisfaction, and stress, generated results that substantiate these arguments.

Likewise, in an experimental study, Liu, Isbell, Constantino, and Leidner (2022) confirmed that a quiet ego may foster emotional intelligence. In this study, half the participants were assigned to a program that was designed to foster a quiet ego. Specifically, participants listened to an audio recording, lasting six minutes, that delineated the four key features of a quiet ego. They learned that people who adopt a quiet ego balance their personal interests with the needs of other individuals. Next, they completed a reflective exercise in which they contemplated how they could apply these lessons to their lives. In the control condition, participants to an audio recording, of similar length, on the natural history of ledges. Participants who learned about a quiet ego subsequently reported higher levels of emotional intelligence and flourishing in life.

Qualities that foster wellbeing: suitable life choices

Yet, many other pathways can also explain this association between a quiet ego and wellbeing. Liu, Isbell, and Leidner (2022) proposed that a quiet ego might also foster an inclination called self-concept clarity—or the degree to which individuals perceive their qualities and capabilities as unambiguous rather than hazy or conflicting. Presumably, when individuals experience a quiet ego, they are not as inclined to inflate their qualities to themselves. Their perceptions of themselves, thus, will be more consistent over time and compatible with the feedback they receive, promoting self-concept clarity.

Armed with this clarity, individuals are more likely to reach suitable choices. They gravitate to activities that are compatible with their values, interests, and capabilities. They also embrace activities that may address their limitations, facilitating growth. Because of these suitable choices, individuals who experience self-concept clarity, partly derived from their quiet ego, should experience satisfaction with their life. Indeed, Liu, Isbell, and Leidner (2022) discovered, after conducting a survey of 500 participants, that self-concept clarity does indeed mediate the relationship between a quiet ego and various indices of wellbeing, such as purpose in life, autonomy, and trusting relationships.

A quiet ego might also inspire individuals to adopt a more authentic lifestyle. Pradhan et al. (2025), for example, demonstrated that individuals who experience a quiet ego report greater authenticity. They tend to choose actions or verbalise opinions that resonate with their values rather than feel the urge to conform to societal expectations. Presumably, a quiet ego, in which people observe themselves impartially, enables individuals to appreciate their values and understand their motives. Consequently, they can more readily choose actions that resonate with these values and motives.

Similarly, because of this quiet ego and authenticity, these individuals may not feel as inclined to flaunt their wealth or status. They will not, therefore, purchase unnecessary possessions to symbolise this rank. Consistent with this possibility, Pradhan et al. (2025) showed that a quiet ego is also associated with voluntary simplicity or a decision to refrain from unnecessary consumption or purchases. Both the authenticity and simplicity that emanate from a quiet ego also predicted the degree to which these individuals perceive their life as meaningful and rewarding.

Prejudice

For several reasons, a quiet ego may diminish prejudice. Specifically, when individuals adopt a quiet ego, they perceive the needs of other people as similar in importance to their own motivations. Consequently, they are not as likely to perceive themselves as superior or special. The tendency to regard some people or groups as inherently superior, called a social-dominance orientation (Pratto et al., 1994), should thus diminish. Because these individuals do not regard some people or groups as inherently superior, unfavourable attitudes towards other religions or communities should dissipate, decreasing prejudice (e.g., Asbrock et al., 2010; Kteily et al., 2011).

Similarly, when individuals adopt a quiet ego, they are especially motivated to grow and to develop. Therefore, they are willing to question the status quo or adapt their existing practices. The tendency of some individuals to comply fastidiously with traditions, called right-wing authoritarianism, should thus dissipate. Consequently, these individuals may welcome communities or people whose customs vary from the norms or traditions of their region, diminishing prejudice (e.g., Asbrock et al., 2010; Cohrs & Asbrock, 2009).

Al-Kire et al. (2022) conducted a pair of studies that corroborates these arguments. In one study, 519 undergraduate psychology students, enrolled at an American university, completed a series of scales including

the Quiet Ego Scale,
the Attitudes towards Muslim Scale (Altareb, 1997)—a measure that comprises questions like “I would support a measure deporting Muslims from America”, “Muslims are strict”, “Muslims should be feared”, and “The Muslim religion is too strange for me to understand”,
the Social Dominance Orientation Scale (Pratto et al., 1994) that comprises items like “Some groups are simply inferior to other groups”,
the Right-Wing Authoritarianism Revised Scale (Rattazzi et al., 2007) that comprises items like “What our country needs most is disciplined citizens, following national leaders in unity”,
the Balanced Inventory of Desirable Responding Short Form (Hart et al., 2015), administered to control the tendency of some individuals to bias their responses towards social conventions.

As the analyses revealed, a quiet ego was associated with positive, rather than unfavourable, attitudes towards Muslims. Social-dominance orientation and right-wing authoritarianism partly mediated this association. This pattern was maintained after controlling socially desirable responding and political orientation.

Benefits and complications of receptiveness to opposing views

Favourable evaluations during interactions

Humble individuals, as Tangney (2000) argued, are receptive to opposing and conflicting ideologies. People who are receptive to these opposing beliefs tend to be trusted and respected. Yeomans et al. (2020), for example, conducted a series of pioneering studies, revealing how people who are receptive to opposing ideologies tend to be evaluated more favourably during conversations. In one study, 238 government professionals, comprising 119 dyads, completed a questionnaire on the first day of a training program. This questionnaire included

the receptive to opposing ideologies scale,
questions that gauge the attitudes of these individuals to three sociopolitical controversies, such as the death penalty—and perceived importance of these controversies.

On the second day, participants were invited to write a compelling argument to support their opinion on one of these controversies. The individuals then received an argument, written by another participant, who had expressed a position that opposed their opinion—and then countered this position with another written response. Then, participants rated the degree to which their opponent seemed receptive to opposing beliefs. Finally, participants rated other respondents on various characteristics such as

they would like this person to be assigned to their team in the future,
whether they trusted the judgment of this person,
the degree to which they would like this person to represent their organisation in a professional setting.

All the responses of participants were subjected to an algorithm, validated in this paper, that estimated the degree to which each text demonstrates the hallmarks of receptivity to opposing ideologies. As these findings revealed, if these individuals perceived someone as receptive to opposing beliefs

they believed this person may be a suitable team member in the future,
they tended to trust the judgment of this person,
they felt this person could represent their organisation professionally.

Thus, if people are receptive to opposing beliefs, they are deemed as suitable, judicious, and professional. Likewise, when the algorithm perceived the responses of someone as receptive to opposing beliefs, this person was also regarded as a suitable, judicious, and professional.

As a subsequent study revealed, whenever editors of Wikipedia wrote posts that display receptivity to opposing beliefs, they were not as likely to receive personal attacks after delivering unfavourable feedback to writers. Thus, displays of receptivity seem to diminish the likelihood of subsequent conflict.

Receptiveness to opposing beliefs and persuasion

In 2021, two academics at the Graduate School of Business at Stanford University, Mohamed Hussein and Zakary Tormala, conducted a comprehensive literature review to show that people who seem receptive to opposing beliefs are often more persuasive (for other evidence, see Hussein & Tormala, 2024). Specifically, after reviewing the literature, the authors uncovered four actions of speakers that demonstrate this receptivity:

conveying uncertainty, such as expressing some doubt about an opinion or indicating a range, instead of specific number or outcome, when forecasting the future,
acknowledging mistakes they have committed, such as recognising their previous beliefs or decisions were incorrect,
highlighting drawbacks of their position or proposal, such as conceding a minor blemish in an argument they are advocating,
converting statements to questions.

Next, Hussein and Tormala (2021) presented original research to show that such actions do indeed signal receptivity to opposing beliefs. For example, in one of their original studies, 200 participants read a plan on how to maintain the economy during COVID. If the person who communicated the plan acknowledged some uncertainty, expressing phrases like “I cannot be entirely sure, but I believe that…”, participants tended to perceive this person as more receptive to ideas and divergent perspectives. Similar research was conducted to show the other actions also signal receptivity.

Finally, Hussein and Tormala (2021) outlined research that demonstrates that such actions tend to enhance the capacity of individuals to persuade other people. Here are some examples:

If an expert posts a review of a restaurant on the internet, participants are more immersed in this review and persuaded by this review if the person expresses uncertainty, such as “I don’t have complete confidence in my opinion, but…” (Karmarkar & Tormala, 2010).
This pattern was not observed, however, is the reviewer was a typical college student rather than an expert (Karmarkar & Tormala, 2010).
Individuals perceive the forecasts of client scientists as more credible if these predictions include a range, such as “Sea levels could rise as little as 1 foot or… as much as 7 feet”, rather than a precise value, such as “Sea levels will rise 4 feet over the next 100 years” (Howe et al., 2019).
Individuals are more likely to purchase an item, such as a brand of headphones, that someone had recommended if this person had also referred to previous mistakes, such as “I had bought Nidec VIA headphones, and that was a mistake” (Reich & Maglio, 2020).
If participants complete an activity and are then invited to repeat this activity because, purportedly, they been assigned the wrong task, they are more willing to comply if the experimenter ascribes this error to themselves rather than denies fault (Gonzales, 1992).
Participants are more likely to purchase items from a company if they discover the organisation had changed their policies in response to a mistake—showing they acknowledge their errors—rather than changed their policies to pre-empt a possible mistake (Kupor et al., 2018).
People are more inclined to purchase an item when an advertisement shows this brand outperforms rivals on most but not all attributes—compared to when an advertisement shows this brand overperforms rivals on all attributes (Etgar & Goodwin, 1982).
Individuals are more inclined to agree with an argument, such as the notion that university applicants should first complete an entry exam, if the writer included a phrase called a tag question, such as “don’t you think?”—but only if the writer was deemed to be an expert (Blankenship & Craig, 2007).

Collectively, as these findings reveal, individuals who display cues that indicate receptivity to diverse opinions, such as acknowledge uncertainty or pose questions, are often more persuasive. Nevertheless, Hussein and Tormala (2021) also delineated the circumstances in which this receptivity may not improve, and could even diminish, the extent to which individuals are persuasive. That is, people who seem receptive to diverse beliefs are not as persuasive if

they are perceived as uninformed or inexperienced rather than experts, authorities, or professionals (e.g., Blankenship & Craig, 2007; Karmarkar & Tormala, 2010; Reich et al., 2018),
they are, therefore, doubted rather than respected, trusted, and liked.

In short, to speak persuasively, individuals should first establish their knowledge or experience on a topic and then display their receptivity to opposing beliefs.

Detrimental effects on reputation

Although receptivity to opposing ideologies is often beneficial, people who display this receptivity can, in specific circumstances, may be evaluated unfavourably. Specifically, as Hussein and Wheeler (2024) showed, in specific circumstances, individuals often do not like a member of their community or party who seems to contemplate and to consider the beliefs of a rival community or party. That is, the beliefs of a rival community or party are often deemed as immoral or unacceptable. Anyone who contemplates these beliefs may be judged unfavourably.

To illustrate, in the first study that Hussein and Wheeler (2024) published in the Journal of Experimental Psychology: General, 250 participants, recruited from the Lucid platform, imagined conversing with someone, called John, about politics and social media. They were informed that John is affiliated with the same political party as are they, such as the Democrats. Apparently

John had recently decided to follow a Twitter account of someone, called Sam Becker, who belongs to another political partly, such as the Republicans
participants then reviewed this Twitter account, discovering that Sam Becker had posted comments that were prototypical of this rival political party,
John then indicated either that he wanted to consider the perspective of this person, demonstrating receptivity, or blocked the account, demonstrating limited receptivity,
participants then evaluated John, indicating whether they perceived him as favourable or unfavourable,
finally, participants indicated the degree to which they perceived the source of information—that is, the Twitter account—as moral or acceptable.

As the findings revealed, if John indicated that he engaged with this Twitter account, he was more likely to be evaluated unfavourably. This pattern was observed especially when participants deemed the Twitter account as immoral or unacceptable. Accordingly, if people engage in material that is deemed as immoral or unacceptable, they tend to be evaluated unfavourably, called the cost-of-receptiveness effect.

Hussein and Wheeler (2024) conducted six more studies and nine supplemental studies to explore the conditions that amplify or nullify this cost-of-receptiveness effect. These studies explored a range of social issues, such as climate change, immigration, terrorism, and military spending. Rather than a Twitter account, these studies explored other sources of information, such as fictitious people, renowned politicians, or unidentified individuals. As the findings reveal, people who seem receptive to opposing beliefs are often evaluated unfavourably in a range of settings. However, these people are evaluated more favourably than people who are not receptive to opposing beliefs in some circumstances such as

when the source of information is a person who belongs to the same party or community,
when the source of information is a person who belongs to a rival party or community—but diverges from a prototypical member,
when the source of information is not identified.

Therefore, to maintain their reputation, if individuals demonstrate their receptivity to opposite beliefs, they should indicate the source of information was someone who deviates from prototypical rivals.

Drawbacks of non-disclosure of imperfection

Psychopathologies

Humble people tend to acknowledge their faults (Tangey, 2000). A variety of studies have explored whether the opposite of this tendency, called non-disclosure of imperfection, is related to various mental health disorders (e.g., Besser et al., 2010; Goya Arce & Polo, 2017; Roxborough et al., 2012). Indeed, Casale et al. (2024) conducted a systematic literature review to explore the association between perfectionistic self‐presentation, including non-disclosure of imperfection, and psychopathologies. To unearth the relevant publications, the researchers

utilised a range of bibliographic databases, including Scopus, PsycINFO, EMBASE, CINAHL, and Cochrane Library,
entered search terms that correspond to perfectionism together with search terms that correspond to psychopathy, such as “anxiety” or “psychiatric disorder”,
also searched relevant conference proceedings and clinical trial registers.

The researchers uncovered 30 studies that fulfill the eligibility criteria. The analyses revealed that

non-disclosure of imperfection is positively associated with psychopathology overall (r = .35), regardless of gender,
specifically, non-disclosure of imperfection is positively related to depression (r=.35), social anxiety (r=.46), and vulnerable narcissism (r=.48) but not to other psychopathological symptoms,
the same patterns emerged in undergraduate students, community samples, and clinical samples,
furthermore, non-disclosure of imperfection and non-display of imperfection were positively associated with the same psychopathologies (Casale et al., 2024).

Arguably, non-disclosure of imperfection coincides with the need in individuals to seek validation from other people. When people need to seek validation, they are more vulnerable to the precarious judgments of other individuals, potentially culminating in social anxiety or depression.

Suppression of pleasant emotions

In addition to severe mental health disorders, non-disclosure of imperfection may suppress pleasant emotions. To illustrate, in one study, conducted by Hill et al. (2020), 78 students enrolled in music programs completed a survey at the beginning, middle, and end of an academic year. The survey included

the Perfectionistic Self-Presentation Scale, comprising items like “I try to keep my faults to myself”,
a Scale of Positive and Negative Experience, in which individuals indicated the degree to which they experienced six positive emotions, such as happy, and six negative emotions, such as sad, over the last four weeks.

When music students reported non-disclosure of imperfection in the middle of the year, they were not as likely to experience positive emotions at the end of year (Hill et al., 2020). Non-disclosure of imperfection thus seemed to inhibit subsequent happiness or other positive emotions. Arguably, after a successful or uplifting event, individuals who strive to conceal their faults may experience worries—such as the worry they may be evaluated more harshly in the future because of this success. These worries might dampen the positive emotions that success would otherwise elicit.

Body dissatisfaction

People who do not disclose their imperfections—perhaps concerned that other individuals will judge these faults harshly—may be especially attuned to flaws in their body. Therefore, non-disclosure of imperfection may be inversely associated with body satisfaction.

To corroborate this possibility, in a study that Lundqvist et al. (2024) published, 170 basketballers and 440 gymnasts, aged between 10 and 25, completed a survey. The survey included

the Perfectionistic Self-Presentation Scale, comprising items like “It is okay to admit mistakes to others” [reverse-scored], but adapted so the items are also applicable to children (Paixão et al., 2021)
the Body Appreciation Scale (Tylka & Wood-Barcalow, 2015) that entails items like “I feel good about my body”.

As hypothesised, after controlling gender, age, and sport, non-disclosure of imperfection was negatively related to body satisfaction (Lundqvist et al., 2024).

Psychopathic leaders

Prevalence of psychopathic leaders

According to many commentators, some of the qualities that characterise psychopathic individuals, such as boldness, may enable people to ascend into leadership positions. If this argument is correct, at least some facets of psychopathy should be positively associated with the inclination or capacity of individuals to become leaders, called leadership emergence.

A variety of studies have explored whether psychopathy is positively or negatively related to leadership emergence. These studies, however, have uncovered some conflicting results. For example

according to some research, the facets of psychopathy that revolves around interpersonal manipulation and callous affect, such as social influence, stress immunity, and fearlessness, are positively related to annual income and rank or position in the organisation (Howe et al., 2014),
similarly, antisocial personality disorder is positively associated with the number of subordinates (Wille et al., 2013),
yet, other research has revealed that psychopathy, as defined in measures of the dark triad, are not significantly associated with salary or position in the corporate hierarchy (e.g., Spurk et al., 2016)—whereas narcissism is positively associated with salary (Spurk et al., 2016)

To reconcile these differences, Landay et al. (2019) conducted a meta-analysis. This study uncovered 46 samples in which the researchers collected information about psychopathy and leadership emergence, such as rank or position, the duration before this person was promoted to a leadership position, number of leadership positions, or peer ratings of whether this person demonstrated leadership. To analyse these data, the researchers utilised the interactive meta-analytic method, recommended by Schmidt and Hunter (2004), that utilises a random-effects model. This analysis revealed that

psychopathic tendencies were positively related to most facets of leadership emergence, except the peer ratings,
the strength of these relationships, however, were only modest rather than pronounced,
these results imply that individuals who demonstrate psychopathy are more likely to become corporate leaders than are the average person but only to a limited extent.

Effectiveness of psychopathic leaders

Commentators often assume that psychopathic leaders are not only prevalent but also ineffective. Several publications have indeed revealed that psychopathic leaders can provoke a range of complications in organisations. For example

staff who rate their leaders as psychopathic, as measured by the B-Scan 360 (Babiak & Hare, 2012; see Mathieu et al., 2013), were more likely to be dissatisfied with their job, to withhold their effort at work, to feel unmotivated, and to consider leaving the organisation (Mathieu & Babiak, 2015),
staff who rate their leaders as psychopathic were more likely to perpetrate counterproductive work behaviours (Boddy, 2014), such as waste resources or disobey instructions (for items, see Spector & Jex, 1998) as well as engage in conflicts.

Yet, some of these complications may not necessarily compromise job performance. Similarly, some research has revealed that psychopathic leaders are sometimes evaluated favourably. For example, as Babiak et al. (2010) revealed, leaders who exhibited high levels of psychopathy were also perceived as more charismatic, manifesting excellent communication skills and strategic thinking.

To uncover more definitive conclusions on this relationship between psychopathy and the effectiveness of leaders, Landay et al. (2019) conducted a meta-analysis on 42 samples in which the researchers collected information about psychopathy and leadership effectiveness—including ratings from supervisors or staff on job performance. The findings revealed that

psychopathic leaders were evaluated as lower on job performance—as evaluated by their supervisors— but these associations were modest rather than pronounced,
yet, psychopathic leaders were not as inclined to adopt leadership styles that tend to be beneficial, such as transformational leadership. unnecessary possessions to symbolise this rank.

Effect of psychopathic leaders on abusive supervision

As a variety of studies have demonstrated, when supervisors, managers, or other leaders show the signs of psychopathy, they are more likely to be abusive to their staff, epitomised by bullying and intimidation. These studies include both qualitative research (e.g., Boddy et al, 2015) and quantitative research (e.g., Boddy, 2011; Lyons et al., 2019).

For example, in one study, conducted by Laurijssen et al. (2024), 100 leaders evaluated the degree to which they exhibit the signs of primary psychopathy—defined as callous interpersonal behaviour and limited empathy or affect. That is, they indicated the degree to which they agree with items like “I enjoy manipulating other people’s feelings” (for the Dutch version that was used, see Barelds et al., 2018). In addition, to evaluate the degree to which this person demonstrates abusive behaviour, a subordinate of each leader completed the Abusive Supervision Scale (Tepper, 2000). Specifically, these subordinates indicated the extent to which their supervisor perpetrates 15 abusive behaviours including

ridicules me,
tells me my thoughts or feelings are stupid,
gives me the silent treatment,
expresses negative comments about me to other people,
does not allow me to interact with my coworkers,
tells me that I am incompetent.

In general, leaders who reported psychopathy were more likely to behave abusively. This result is significant because a variety of problems can be ascribed to abusive supervisors. For example, when supervisors are abusive

their staff are more likely to experience depression, anxiety, exhaustion, dissatisfaction with life, and other unpleasant states (Tepper, 2000),
consequently, these staff are inclined to develop unfavourable attitudes towards their job, such as job dissatisfaction and diminished commitment to their organisation (Tepper, 2000),
in addition, these staff do not perform as efficiently, generating fewer products or outputs (e.g., Walter et al., 2015).

Accordingly, some research has explored the conditions or practices that may diminish the association between leader psychopathy and abusive behaviour. For example, in their study of the relationship between leader psychopathy and abusive behaviour, Laurijssen et al. showed that rule clarity moderated this relationship. That is, when organisations disseminated unambiguous rules about how staff should conduct themselves, the positive association between the primary psychopathy of leaders and their abusive behaviour declined and even reversed. Psychopathic leaders, in these circumstances, were not as abusive. Arguably,

leaders who report primary psychopathy are sometimes unsure of which behaviours are deemed as acceptable,
indeed, according to Raine (2019), the neural regions that underpin moral decisions—such as regions that include the superior temporal gyrus, angular gyrus, anterior cingulate, amygdala, and cortical regions—may be impaired in antisocial personality disorder and thus psychopathy,
therefore, unambiguous rules can be informative to these individuals and improve their behaviour.

CEO hubris

Many CEOs exhibit hubris or unwarranted overconfidence. In some instances, this hubris can be beneficial, such as occasionally foster innovation. But, usually, this hubris is detrimental. Nevertheless, many studies have explored the conditions or circumstances that diminish the adverse impact of hubris in CEOs or other executives.

The moderating role of governance

In some organisations, boards tend to be vigilant. For example, boards are typically vigilant—and inclined to temper the risky choices of overconfident CEOs—when a high proportion of members do not work at the organisation and the chair is not the CEO. In these instances, these CEOs are not as likely to reach inappropriate decisions, such as pay an inordinate fee to acquire another business.

Hayward and Hambrick, two academics at Columbia University, first unearthed this possibility in 1997. In this study, the researchers examined 106 instances in which a firm had acquired another company. Specifically, the researchers

calculated the difference between the price the company had paid to acquire the company—relative to the estimated value of this other company, derived from the stock price a month earlier,
collated various measures of the stock price of the merged firm over time,
distilled several measures of CEO hubris—such as the remuneration the CEO receive compared to the next highest earner at the company as well as the extent to which the CEO had attracted favourable comments in the media.

After controlling a range of measures, such as potential of synergy between the two firms, when CEOs exhibited the signs of hubris, they were more likely to pay excessively to acquire the other company (Hayward & Hambrick, 1997). For example, if CEOs earned significantly more than other executives, they paid more to acquire the other company than perhaps the organisation was worth. In these instances, the stock price of the merged firm tended to drop and hence the wealth of shareholders tended to decline.

However, when a high proportion of board members did not work at the organisation and the chair was not the CEO, the association between hubris and these overpayments of acquisitions was not as pronounced. As this finding implies, effective government may curb the risky investments that often coincide with hubris (Hayward & Hambrick, 1997).

Other studies have also unearthed similar findings. Park et al. (2018), for example, explored whether CEO hubris is associated with the performance of firms. To measure hubris, the researchers assessed the degree to which CEOs express words that are synonymous with confidence rather than caution in annual reports as well as the number of times these CEOs were praised in the media or received prizes. To measure firm performance, the researchers measured the return on assets relative to the industry median. In a sample of 654 Korean firms, CEO hubris was inversely associated with firm performance. This detrimental effect of hubris, however, was most pronounced when

the CEO or family owned more than 5% of shares—a measure of CEO power,
the CEO was also a chair,
most board members were also staff, potentially impeding governance, because too many members report to the CEO (Park et al., 2018).

The moderating role of managerial discretion

The discretion that CEOs are granted does not depend only on the governance of boards. To illustrate, this discretion partly depends on characteristics of the market or industry. Specifically

when the sales figures in an industry are growing, called market munificence (Keats & Hitt, 1988), organisations are granted more opportunities to thrive and thus grant CEOs more discretion to pursue these opportunities,
when an industry is replete with many competitors, called market complexity (Palmer & Wiseman, 1999), organisations tend to explore various collaborations and opportunities rather than adhere to existing practices—enabling CEOs to utilise their discretion more often.

The discretion that CEOs are granted also depends on various characteristics of the organisation. To illustrate,

when organisations are older and larger, they are more inert, offering CEOs fewer opportunities to initiate change and to utilise their discretion,
when organisations have developed intangible resources, such as patents, and expend a significant portion of their sales to research and development, they are granted more opportunities to explore various strategies, granting the CEO more discretion.

As Li and Tang (2010) proposed and demonstrated, these determinants of discretion tend to amplify the impact of CEO hubris on risky decisions. This study was conducted on 2790 Chinese firms. The researchers assessed

hubris—defined as CEOs who indicated the firm was very profitable even when the return on sales was limited,
risk taking—and specifically whether the firm had invested in novel technologies recently,
other characteristics of the market that affect the discretion that CEOs are granted.

As the researchers demonstrated, CEO hubris was positively associated with investment in risky technologies. This relationship, however, was especially pronounced when CEOs were granted discretion (Li & Tang, 2010). That is, when the sales figures in this industry were growing, the number of competitors was high, the organisation was not old, and research and development expenditure was high relative to sales, CEO hubris was more likely to translate into risky investments (Li & Tang, 2010). In these circumstances, board governance becomes especially vital.