The Dual Faces of Leadership: CEOs’ Dark and Light Traits in Shaping Business Ethical Climate and Sustainability

Based on upper echelons theory, the personality of the chief executive officer (CEO) plays a crucial role in shaping a company’s internal climate and external strategic orientations. In our multi-informant study of 122 Turkish businesses, we investigated the impact of CEOs’ dark personality traits—Machiavellianism, narcissism, and psychopathy—and light personality traits—faith in humanity, humanism, and Kantianism—on their companies’ internal ethical climate and external sustainability orientation. Using three wave data from 122 CEOs and 244 top executives, we found that CEOs’ Machiavellianism and psychopathy were negatively related to the business ethical climate, while CEOs’ humanism and Kantianism were positively related. Interestingly, CEOs’ psychopathy and narcissism were also negatively related to business sustainability orientation, although none of the light personality traits significantly predicted this business aspect. Lastly, our findings suggest that the ethical environment within a business profoundly influences its strategic priorities and those with robust ethical climates are more likely to prioritize long-term sustainability. These findings underscore the significant influence of CEO personality on various dimensions of organizational behavior, highlighting the importance of understanding specific personality traits in driving ethical and sustainable business practices.