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

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  • Jagannath Sharma Nistala
  • Kamran Quddus
  • Divya Aggarwal

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.

Suggested Citation

  • Jagannath Sharma Nistala & Kamran Quddus & Divya Aggarwal, 2026. "Measuring CEO hubris through the hubris quotient: implications for corporate governance in an emerging market," International Journal of Corporate Governance, Inderscience Enterprises Ltd, vol. 16(1), pages 90-130.
    • Handle: RePEc:ids:ijcgov:v:16:y:2026:i:1:p:90-130
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