THERE has been a growing concern in the corporate world regarding the influence of CEO narcissism on an organisation’s sense of business ethics. In many organisations, leaders with excessive self-focus and overconfidence often prioritise personal image, profits and short-term gains over legal and ethical responsibilities.

Research regarding behavioural corporate finance indicates that CEOs with strong narcissistic tendencies, characterised by excessive self-confidence, dominance and a heightened need for admiration, are more likely to engage in aggressive tax strategies. While such strategies may enhance short-term financial performance and personal reputation, they often come at the cost of ethical responsibility and legal transparency.

Recent studies in corporate governance also suggest that narcissistic CEOs are more likely to engage in aggressive tax planning and exploit loopholes to minimise tax payments. While such actions may temporarily benefit firm earnings, they ultimately harm national revenue systems, reduce public resources and weaken trust in institutions.

In developing economies like Pakistan, where tax compliance is already a major challenge, such practices further deepen inequality and limit government capacity to invest in education, healthcare and infrastructure. This makes the issue not only a corporate governance concern, but also a broader social and economic problem.

Regulatory bodies and tax authorities must strengthen monitoring systems and enforce stricter corporate transparency standards. At the same time, organisations should adopt better leadership selection processes that consider ethical behaviour and psychological traits, not just financial performance.

Addressing this crucial issue is essential for building a fair, transparent, effective and accountable corporate environment that supports overal national development.

Rafia Rafique Ahmed Panhwar
Dadu

Published in Dawn, July 3rd, 2026