In the fast-evolving landscape of global business, the role of the CEO has become increasingly multifaceted and complex, demanding a fine balance between confidence and collaboration. A groundbreaking study published in the Journal of Management Studies sheds light on a critical but often overlooked psychological trait among top executives: overconfidence. The research reveals a compelling connection between CEO overconfidence and a reduced inclination to delegate crucial responsibilities during mergers and acquisitions, particularly in scenarios involving intricate business dealings.
Modern corporations operate in an environment of unprecedented complexity. With companies expanding across multiple countries and diversifying into various industry sectors, the CEO’s ability to harness diverse expertise within their organizations has never been more vital. Jared Smith, co-author of the study and professor of finance at North Carolina State University’s Poole College of Management, emphasizes that delegation serves as a pivotal mechanism for CEOs. It enables them to integrate specialized knowledge from different corners of their enterprise, thus enhancing decision-making amid multifaceted challenges that define today’s corporate world.
Delegation is not merely about offloading tasks; it is a strategic tool that empowers CEOs to prioritize high-impact decisions while simultaneously leveraging the collective intelligence of their teams. The study investigates the vital question of whether CEO overconfidence affects their willingness to embrace this collaborative mindset. “Overconfidence, an inflated belief in one’s own abilities, might seem beneficial at first glance, fostering decisiveness and vision. However, it may paradoxically impair a leader’s openness to alternative viewpoints and expert counsel,” notes Smith.
To explore this hypothesis, the researchers meticulously analyzed a vast data set comprising 3,690 mergers and acquisitions (M&As) conducted by publicly traded companies from 2000 to 2019. These transactions were sizable, each valued at a minimum of $50 million and representing at least 1% of the acquiring company’s equity, ensuring the examination focused on deals of substantial strategic importance. Within this data set, they identified 1,634 CEOs whose behavioral traits could be measured and compared.
The study employed a sophisticated approach to gauge CEO confidence levels by examining their patterns of stock option exercise—a novel and objective proxy widely recognized in financial research. Stock options provide incentives linked to risk-taking and future performance, and their usage patterns can reveal underlying confidence biases. To evaluate delegation, the researchers conducted a comprehensive content analysis of press releases and news articles related to each M&A event. The premise was that mentions of individuals other than C-suite executives indicated delegated involvement in the transaction process.
This innovative method was supplemented with a review of the “background of the merger” documentation submitted to the Securities and Exchange Commission, which includes detailed records of internal meetings and negotiations. The correlation they discovered was striking: when non-executive stakeholders were referenced in public communications, these individuals were indeed active participants in strategic discussions. This triangulation validated the assumption that visible delegation correlates strongly with substantive engagement.
Quantitatively, the findings are profound. Approximately 41% of the CEOs studied exhibited clear signs of overconfidence. Compared to the average CEO, these overconfident leaders were found to delegate acquisition responsibilities 10-15% less frequently. This reluctance to share decision-making authority raises serious questions about the potential blind spots created by overconfidence, especially when grappling with the numerous variables and unknowns that M&A activities invariably entail.
The nature of the deals further modulated this relationship. When companies ventured into unfamiliar industries through acquisitions, overconfident CEOs displayed an even greater tendency to withhold delegation. This phenomenon is counterintuitive and concerning because unfamiliar markets arguably demand the widest spectrum of expertise and input, precisely where collaboration would seem most beneficial. “In industries where the learning curve is steep, an overconfident CEO’s resistance to incorporate additional perspectives might lead to suboptimal outcomes,” Smith explains.
Perhaps the most compelling insight emerged when the researchers examined organizational complexity. They noted an inverse relationship between the breadth of an acquiring firm’s business segments and the delegation propensity among overconfident CEOs. Conventionally, theory posits that as complexity increases—with numerous product lines or business units—executive reliance on specialized knowledge should grow. However, the study reveals that overconfident leaders buck this trend, assuming greater personal control instead of seeking diverse expertise, potentially undermining decision quality under complex conditions.
This paradox underscores the dual-edged nature of confidence in leadership. While self-assurance is indispensable for steering large organizations, surpassing a threshold into overconfidence restricts leaders’ openness to collaboration and outside input. The consequences extend beyond internal dynamics, possibly impairing the overall strategic agility required to successfully execute high-stakes transactions in volatile markets. As Smith remarks, “Our findings suggest that unchecked overconfidence may compromise CEOs’ ability to marshal the right expertise at the right time.”
The study leaves open important questions about the downstream effects of reduced delegation by overconfident CEOs. In particular, how these behavioral tendencies influence post-merger integration success and long-term company performance remains an intriguing and necessary avenue for future research. The ability of organizations to realize value from acquisitions hinges critically on effective coordination, communication, and leveraging collective intelligence—all of which depend on distributing responsibility appropriately.
In the broader context of executive psychology and corporate governance, these results contribute meaningful insights into how subtle cognitive biases shape strategic choices. They challenge boards and stakeholders to recognize the risks associated with overconfidence, encouraging institutional checks and balancing mechanisms that promote deliberation and shared leadership. Beyond CEOs themselves, this research underscores the importance of cultivating organizational cultures that encourage constructive dissent and draw upon diverse perspectives to navigate complexity.
Ultimately, the study “Leave it to Me: Overconfident CEOs’ Lower Propensity to Delegate Acquisition Responsibility” serves as a clarion call to reconsider the interplay between confidence and collaboration in top management. As companies face increasingly ambiguous and dynamic competitive landscapes, cultivating leaders who balance conviction with humility may prove pivotal for sustainable success.
Subject of Research: People
Article Title: Leave it to Me: Overconfident CEOs’ Lower Propensity to Delegate Acquisition Responsibility
News Publication Date: 20-Mar-2026
Web References: http://dx.doi.org/10.1111/joms.70095
References: Smith, J., Josefy, M., & Greene, D. (2026). Leave it to Me: Overconfident CEOs’ Lower Propensity to Delegate Acquisition Responsibility. Journal of Management Studies. https://onlinelibrary.wiley.com/doi/10.1111/joms.70095
Keywords: CEO overconfidence, delegation, mergers and acquisitions, corporate governance, executive psychology, organizational complexity, strategic decision-making, leadership behavior
