A recent study has found that narcissistic CEOs can have deleterious impacts on the companies they lead. They negatively affect the firm’s accounting quality, are more likely to be fraud risks, and drive up both external audit costs to an economically and statistically significant degree—also, they make those same auditors more likely to resign.

“CEOs with narcissistic personality characteristics seek opportunities to affirm their grandiose senses of self. They are known risk takers who will manipulate or exploit other people and situations to create self-enhancement opportunities,” said the study’s conclusion.

Because it can be rather difficult to diagnose narcissism using the standard methods—a questionnaire scoring people along the Narcissistic Personality Index—the researchers had to use relative non cash and non-cash pay, as well as the size and prominence of the CEO’s photograph in the firm’s annual report, to create a  composite score for executive narcissism.

While the negative impact that a narcissistic CEO can have on a company may lead one to believe they will lead their company to flaming ruin in a very short time, a 2007 study—which used the prominence of the CEO's photograph in annual reports, the CEO's prominence in press releases, the CEO's use of first-person singular pronouns in interviews, and compensation relative to the second-highest-paid firm executive to measure narcissism—found that this is actually not the case: rather than run their companies into the ground, they found that these businesses actually do no better or worse than those led by more emotionally healthy individuals.

“Results of an empirical study of 111 CEOs in the computer hardware and software industries in 1992–2004 show that narcissism in CEOs is positively related to strategic dynamism and grandiosity, as well as the number and size of acquisitions, and it engenders extreme and fluctuating organizational performance. The results suggest that narcissistic CEOs favor bold actions that attract attention, resulting in big wins or big losses, but that, in these industries, their firms' performance is generally no better or worse than firms with non-narcissistic CEOs,” said the 2007 study.

One of the study’s authors, in an article in the Atlantic, noted too that narcissists are also more likely to wind up in the c-suite in the first place, not only because they’re good at hiding their negative behaviors from superiors who can get them promoted but also because, like it or not, people tend to view churlish actions more favorably, which people seem to associate with leadership in the right contexts. This is in contrast to how people seem to view being nice, according to the Atlantic, which people associate with servility.

This lines up with many other studies done showing that, disturbingly enough, there seems to be a higher concentration of narcissists in top corporate leadership compared to the general population.