CEOs and CFOs overestimating their own abilities and urging for constant admiration and affirmation are most likely to fraud and show non-integrate behaviors, a survey shows.

Zortify, a Luxembourgish start-up company specialized in AI for human decision-making, has issued “the largest single study worldwide on narcissism”.

“The objective is to identify to what extent narcissism is present in society and especially in companies and top-executive levels,” say the company’s cofounders Florian Feltes and Marcus Heidbrink, who conducted the research together with Victoria Berg a consultant and researcher.

Feltes is professor for digital leadership. And organizational psychologist Heidbrink has over 20 years of experience in people diagnostics and management assessment.

Narcissism, Machiavellianism, psychopathy

Narcissism can be defined as “egoism and egocentrism” up to “a reflection not only of an apparent trend in mental illness but also of the strains and distortions in the lives of essentially healthy people”.

However, the survey refers to the Canadian personality psychologist Delroy L. Paulhus who describes narcissism as part of the “dark triad”, consisting of the personality traits narcissism, Machiavellianism and psychopathy.

“The dark triad deliberately does not outline pathological personality disorders that require psychological treatment. Rather, it represents subclinical personality traits that are highly, but not pathologically, expressed,” they detail.

Our portfolio losses over the last years were always connected to fraud or non-integrate behaviors from CFOs and CEOs.

As told by investors to Zortify

“People with narcissistic traits live in a constant ambivalence between unrealistic and self-perceived grandiosity on the one hand and inferiority on the other. Narcissists tend to overestimate their own abilities. Their urge for constant admiration and affirmation is above average. They believe they are someone special and unique, which is why they are entitled to power and high esteem”.

Narcissism-detecting algorithm

The survey tested 9,918 people – 5,303 women and 4,615 men – from May to November 2020, with the objective to figure out to what extend this personality trait can correlate with business success, and more particularly how robust it is against social desirability.

The researchers used their own methodology based on a fully automated personality analytics approach: “Up to now, narcissism values have almost exclusively been collected via self-assessment questionnaires,” they explain. “Our study was conducted via a home-made AI-algorithm that evaluated the subjects’ formulated answers to open-ended questions through text analysis”.

The idea of the study emerged after investors expressed concerns on the integrity of top-level managers of firms they were investing in: “They told us that their portfolio losses over the last years were always connected to fraud or non-integrate behaviors from CFOs and CEOs,” both startuppers recall. “They therefore asked us to help assessing narcissism, as it costs billions of damages to companies worldwide.”

The surveyed population included 2,510 managers, 734 of them at board level. “Narcissism is widespread in management, much more so than in the entire population,” the study finds. “This tendency has by no means diminished with New Work and other modern management methods”.

Women in top management have significantly lower narcissistic scores than men.

Survey on narcissism

Companies still favor male-dominance

Unfortunately, “many companies tolerate self-promoters in their ranks,” the document adds. “But they continue to convey the ideal of the successful male-dominant manager also known as ‘classic alpha-male leader’ in their promotion programs – and lose talent as a result.”

Another finding says that “there is a perfect correlation between narcissism and leadership emergence”, as the highest narcissism scores are found in top management “the more narcissistic, the higher up the career ladder you go,” the survey notes.

But the study also shows “that women in top management have significantly lower average scores than men.”

“Companies need to prepare for a more narcissistic generation to come” (photo: Etienne Girardet, unsplash).

However, their authors notice that narcissism is widely spread among young generations: “The data show it is young men – and even women of the under-30 generation – who scored the highest level in narcissism,” they write. “The most extreme scores were found in men around 30. This is what we call ‘the young bull phenomenon’”.

Hence, the researchers suggest that companies “need to prepare for a more narcissistic generation to come and should analyze this trait when hiring and promoting people”.

Founded in 2018, Zortify headquarters in the Luxembourg City Incubator and operates a German branch in Cologne. The 10 -person company provides assessment and recruitment solutions on personnel selection, transformation processes, cultural development and leadership, based on artificial intelligence and text analysis, to companies including banks and investment management companies.