CEO hubris in corporate disclosure: A double-edged sword for firm resilience

Abstract

A key question in the strategic management literature concerns how and through which mechanisms CEO hubris shapes firm's outcomes. Positioned within this debate, we argue that the implications of hubris appear to depend on how it is expressed in corporate disclosure. We distinguish between two forms of hubristic disclosure: rhetorical hubristic disclosure, which emphasizes the firm's resources, capabilities, and prospects and may reinforce stakeholders' confidence, and egocentric hubristic disclosure, which elevates the CEO's personal agency and may undermine firm legitimacy. We test our arguments through a longitudinal analysis of S&P 500 firms' annual reports over the 2014–2024 period, including the COVID-19 crisis. Our findings show that rhetorical hubristic disclosure is positively associated with firm resilience, suggesting that firm-oriented, confident communication may help sustain perceptions of organizational strength during external shocks. In contrast, egocentric hubristic disclosure is negatively associated with firm resilience, suggesting that CEO-centered communication may hinder adaptation to external shocks. These results contribute to the literature by showing that CEO hubris is not uniformly detrimental; rather, its implications for resilience depend on whether hubristic disclosure is directed toward the organization's collective capabilities or toward the CEO's individual agency.