Why would Conrad Black, CEO of Hollinger International, bill $2,400 in handbags to his newspaper publishing firm and have the company pick up the tab for his personal servants?
The simple answer is that some CEOs lose their sense of reality and feel entitled to whatever they can get away with, psychiatrists and corporate governance experts say.
"They begin to feel that everything is going to be done for them, and they have the right to that," said Dr. Robert Gordon, a psychoanalyst and partner in the Chicago firm Analytic Consultants, which works with business clients. "In our recent business culture, it has become more and more accepted to live like a potentate."
In extreme cases, some top executives believe the rules of society do not apply to them, Gordon said. A grandiose sense of self develops, and they feel larger than life. They experience no remorse for actions that hurt others.
The mental-health community has a word for such individuals: sociopaths.
Of course, no dysfunctional individual exists in a vacuum. In the corporate world, chiefs who are losing their bearings have boards of directors that are supposed to help them maintain perspective. But boards often are stacked with friends of the top guy, which makes it hard — almost impossible — for them to say no, said Nell Minow, a corporate-governance specialist.
When the jig is finally up — the company has gone bankrupt or the executive has been indicted — there is no reason to expect a teary confession or mea culpa.
"Unless it's some kind of public redemption, some of these big business guys are difficult to work with," Gordon said. "They don't want to change. They feel like there's nothing to change."