In service of the CEO's ego: The relationship between CEO narcissism and top management team composition

The composition of a firm's top management team (TMT) has been repeatedly shown to influence crucial organizational outcomes. However, few studies have investigated which factors shape TMT composition. Building on upper echelons theory, we argue that narcissistic CEOs structure TMTs to fulfill their psychological needs. We examine this proposition by analyzing the relationship between CEO narcissism and TMT composition in a sample of 641 CEOs from 399 U.S. firms listed on the S&P 500 index between 2007 and 2017. We find that CEO narcissism is associated with lower average TMT role tenure and with more diversity separation in TMT firm tenure. These results support the argument that narcissistic CEOs shape their TMTs to fulfill their psychological needs. We contribute to upper echelons theory by suggesting that CEO personality, particularly CEO narcissism, may influence TMT composition. We also add to research on CEO narcissism by adding to scarce evidence for the influence of CEO narcissism on TMT composition and by suggesting that TMT composition may be an indirect link between CEO narcissism and differences in firm-level outcomes.