Steve Davidoff has a well-researched piece on the antics and impact of narcissistic CEOs in The New York Times. The allegations of deeply selfish and unlawful actions by chief executive of Delphi Financial, Robert Rosenkranz, appear to have motivated the piece. Here is just one of the vile acts listed by Davidoff:
Despite restrictions in Delphi Financial’s charter, Mr. Rosenkranz demanded in negotiations that he be paid over $110 million more than other shareholders, a number that a special committee of Delphi Financial’s board negotiated down by about $50 million.
To me, the piece really gets interesting when Mr. Davidof digs into the research, including:
1. Henrik Cronqvis and his colleagues found that the more deeply a company was in debt, the more its chief executive was willing to borrow to buy a house!
2. In another study: "Flying small planes is viewed as thrill-seeking behavior. Professors Cain and McKeon found that chief executives with pilot licenses were more prone to engage in acquisitions, with the theory that takeovers are risky, yet exciting ventures."
This second study reminds me of a hypothesis that Huggy Rao (my co-author of the scaling project) has proposed: Male CEOs who have "trophy wives" are more likely to lead companies that make risky investments, as having a trophy wife is indicative that the boss had been fooling around at some point (also a risky behavior).
The question that always nags at me when it comes to narcissism and related bad behavior displayed by powerful people is how much of it is provoked in a once decent person who is infected with power poisoning (there is plenty of evidence that this happens, much of which I review in my bossholes chapter in Good Boss, Bad Boss) versus the explanation that giving a selfish and narcissistic jerk a powerful position gives them greater opportunity to reveal their greed and self-absorption. In real life, it is probably some of both. And the way the organization is structured makes a difference too — this is one reason why people who study corporate governance often advocate having "checks" on CEO power.
In any case, I thought it was a nice article and it raises all osrts of issues about CEO selection and the structure of executive roles.
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