We propose a mediation model to explain the relationship between CEO humility and firm performance. Building on upper echelons, power, and paradox theories, we hypothesize that when a more humble CEO leads a firm, its top management team (TMT) is more likely to collaborate, share information, jointly make decisions, and possess a shared vision. The firm will also tend to have lower pay disparity between the CEO and the TMT. The humble CEO and TMT, in turn, will be more likely to adopt an ambidextrous strategic orientation, which will be associated with stronger firm performance. We tested the model by using both survey and archival data that were collected at multiple time points from 105 small-to-medium-sized firms in the computer software and hardware industry in the United States. Findings largely support our theoretical assertions, suggesting that CEO humility has important implications for firm processes and outcomes.
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