Title: Measuring CEO hubris through the hubris quotient: implications for corporate governance in an emerging market

Authors: Jagannath Sharma Nistala; Kamran Quddus; Divya Aggarwal

Addresses: Department of Accounting and Finance, Indian Institute of Management Ranchi, Prabandhan Nagar, Nayasarai Road, Ranchi, Jharkhand 835303, India ' Department of Accounting and Finance, Indian Institute of Management Ranchi, Prabandhan Nagar, Nayasarai Road, Ranchi, Jharkhand 835303, India ' Department of Accounting and Finance, Management Development Institute Gurgaon, Gurugram – 122007, India

Abstract: This study develops the hubris quotient (HQ), a governance-proximate index that captures the behavioural and structural manifestations of CEO overconfidence, distinguishing it from the enduring personality trait of narcissism. Analysing Indian listed firms, we examine their asymmetric effects on performance. Addressing endogeneity with Arellano-Bond GMM estimators, we find a significant duality: HQ is positively associated with short-term ROA but negatively associated with Tobin's Q. This finding indicates that while hubris may boost profitability through assertive action, it concurrently imposes a market valuation penalty, eroding investor confidence. Robustness checks, including factor analysis, support these findings. The HQ provides a transparent tool for calibrating governance to strike a balance between entrepreneurial initiative and sustainable long-term value.

Keywords: behavioural corporate finance; CEO hubris; corporate governance; Emerging markets; hubris quotient; HQ; leadership behaviour.

DOI: 10.1504/IJCG.2026.152097

International Journal of Corporate Governance, 2026 Vol.16 No.1, pp.90 - 130

Received: 11 Dec 2024
Accepted: 26 Nov 2025
Published online: 06 Mar 2026 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article