Power corrupts and absolute power corrupts absolutely.
When people rise to CEO or, say, managing director of the IMF, they can fall prey to a psychological condition known as CEO disease. It’s a term that describes “the isolation that envelops a leader when subordinates become reluctant to disclose bad news or worst-case scenarios that might trigger a shoot-the-messenger response.”
Meet 17 men who suffered from CEO disease >
These powerful people will begin to feel they can move past barriers and even break the law. When subordinates established a pattern of not sharing when things are bad, the behaviour continues unchecked.
To guard against CEO disease, open and honest communication in an company is essential.
Take Dominique Strauss-Kahn. His former lover warned the IMF three years ago about his behaviour toward women. DSK himself admitted last month that he might some day be accused of rape. Had colleagues at the IMF publicly or personally addressed this known problem, the organisation could have avoided the recent travesty.
Company: WR Grace
J.P. Bolduc, the former CEO of chemical company W.R. Grace, left abruptly in March 1995 after allegations of sexual harassment. Female employees had complained that he had harassed them verbally and physically for years. Bolduc denied the allegations, but stated in a press release of the time that he was quitting because of 'differences in style and philosophy.'
Charles Campbell resigned quietly in 1999 after sexual misconduct accusations from his former assistant. According to her, the (married) CEO of the shoe manufacturer Florsheim allegedly had romantic meetings in his corporate apartment, brought his mistresses on business trips and enjoyed himself with them in company limousines. The details of the lawsuit were not divulged.
Company: Keefe, Bruyette & Woods Inc.
James J. McDermott Jr., the former CEO of Keefe, Bruyette & Woods Inc., not only had an adulterous relationship with a porn star known as 'Marilyn Star', he also gave her insider investment information so she could make at least an extra $88,135. He resigned from the investment bank in June 1999, and was arrested and charged with insider trading in December of the same year. He was convicted in April 2000.
Company: Savvis Communications
Robert McCormick allegedly spent $241,000 in a Manhattan strip club in 2003, and then declined to pay the massive tab on his corporate charge card. That's according to American Express, who sued Savvis Communications Corp. At first, McCormick's excuse was fraud, as he said he had only paid $20,000 in the club. But in the end, he had to leave the company in 2005.
The irony of it. Former Boeing CEO Harry C. Stonecipher had been asked to come back in 2003 to boost the firm's reputation after a series of military procurement scandals that had ended up in the resignation of his predecessor. That didn't really work out - he had to resign in March 2005 after it came out that he had an affair with a female employee. Mission accomplished. He quit in 'embarrassment', without specifying what exactly was so embarrassing.
Now former HP CEO Mark Hurd resigned after a claim of sexual harassment made by a former contractor against him and HP was investigated. It came out that sexual harassment was not involved, but that he had a relationship with a contractor who received payments that were seen as 'inappropriate'.
Company: Integral Systems Inc.
Steven R. Chamberlain was indicted by a jury in late 2005 in Howard County of two sex crimes, including sexual abuse of a minor and a third-degree sex offence. Apparently, he had not chosen to tell the company's board about the charges, seeing them as a personal matter. He left possibly to save Integral's reputation.
Henry Nicholas -- the billionaire who supposedly fed people ecstasy and hosted orgies at a warehouse
Nicholas was already under investigation for securities fraud in 2008 when many more details about his lifestyle started surfacing. Investigators found that he had properties in California where he stashed cocaine and other drugs, that he routinely hired escorts for himself, and that he was secretly building a 'party lair' under his mansion that not even his wife knew about.
Company: Reflex Systems
Privateer was CEO of an Atlanta-based data security company until a young girl came forward to levy child molestation charges against him. Hotel receipts corroborated her story, and his arrest cracked open a child trafficking ring in the town of Gwinnett, GA.
Before Hayward, there was Lord Browne. The former BP CEO resigned in 2007 because of embarrassing details of his gay sex life, brought up in a court case and published in the media. The juicy details about his relationship with his lover cost him his job, and at least 3.5 million pounds from his retirement package.
Company: David Jones
Inappropriate behaviour was Mark McInnes' downfall. He quit his job at the Australian retailer after a female colleague complained about his attitude and sued him. He immediately resigned after admitting how 'unbecoming of a chief executive' his behaviour was and apparently left the country.
David Davidar left Penguin after a sexual harassment complaint of a former director of the company, Lisa Rundle. She had accused him of harassing her for three years and then assaulting her at the Frankfurt Book Fair. Although Davidar and Penguin stated that the former CEO went voluntarily, the lawsuit between Davidar, Rundle and Penguin was settled quietly, reports the Times of India.
Company: Keane, Inc.
Brian Keane resigned from his Charlestown, MA technology firm when an unidentified female executive brought sexual harassment charges against him. The complaint was settled for $1.14 million and was the second one of its kind -- a different complaint had been lodged earlier and was settled for an undisclosed amount.
Company: Food for the Poor
Mahfood runs a large charity dedicated to feeding the unfortunate, but he reappropriated several hundred thousand dollars and gave it to two women he slept with.
Company: Kier Group
Dodds is CEO of UK construction company Kier Group. He got involved with Deena Mattar, the company's CFO. Despite getting eviscerated in the British media when it came to light that he used company resources to fix up Mattar's house, Dodds never lost his job. He retired at the age of 64, saying he had no regrets.
Company: Cricket Club of India
After being accused of sending obscene emails to a woman, Rajpal shot himself in the head at his home. Lawyers said the woman's accusations are suspect -- she filed the complaint two full years after she allegedly received the e-mails.
Company: American Apparrel
Charney has already confessed to having numerous affairs with female coworkers. Two women even sued him, saying that he masturbated in front of them at work. His most current legal battle has him fighting charges of keeping a teenage girl as a sex slave.
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