Posted on 10/14/2002 9:15:39 AM PDT by Tumbleweed_Connection
The hit parade of corporate scandal isn't about money. It's about boredom. It's not about wealth. It's about loneliness. It's not about power. It's about insecurity.
And it's not about greed. It's about unrealistic fantasy.
So say top corporate psychologists, management experts and CEOs asked by USA TODAY to answer the simple question: Why? What motivates wealthy CEOs to steal from their companies?
Take Dennis Kozlowski, former CEO of Tyco, who, along with two others, has been charged with looting $600 million from the company. Or Andrew Fastow, former Enron CFO, who has been charged with masterminding schemes that officials say let him pocket millions of dollars.
Take former Global Crossing Chairman Gary Winnick, under fire for selling $734 million in Global Crossing stock before the company's collapse. Or John Rigas, founder of Adelphia Communications, who--along with two sons--was accused of stealing hundreds of millions from the company.
Some of the nation's top corporate psychologists saythis isn't about simple greed. It's about a warped executive mind-set--stoked by the faux tech boom of the 1990s--that's so out of whack it threatens the credibility of big business.
Why did Kozlowski need a $15,000 umbrella stand or a $6,000 shower curtain? Why would multimillionaire John Rigas allegedly take $13 million from his company to build a golf course?
Five companies--Enron, WorldCom, Tyco, Qwest and Global Crossing--have destroyed a combined $460 billion in shareholder value while moving inexorably toward bankruptcy.
What got us here were unfit leaders. ''Their desires become insatiable once they reach the top,'' said Steven Berglas, a renowned executive coach and instructor at the University of Southern California. ''They become toxic CEOs because their job challenges are no longer rewarding.''
Here are the most common--and often surprising--explanations the experts gave for over-the-top greed-at-the-top:
* Poor self-image. Despite a public perception that they swagger with huge egos, some scandal-ridden executives suffer from very low self-esteem, said USC's Berglas. ''They keep building monuments to themselves to dispose of their negative self-images,'' he said.
His favorite candidate for that category: Martha Stewart, the lifestyle guru, who comes from a working-class family. Worth millions, she is accused of acting on inside information in trading nearly 4,000 shares of ImClone to avoid a loss of a few thousand dollars.
Some simply want to bury their humble upbringings, said Jeffrey Sonnefeld, associate dean at Yale School of Management. ''They were so desperate to define themselves by what they weren't that they forgot who they were.''
* The myth: ''I deserve it.'' Successful former General Electric CEO Jack Welch might be the best example of this school of thought, said Harry Levinson, a retired corporate psychologist.
His GE retirement package, revealed in a divorce settlement, had GE picking up the tabs on tickets to more sporting events than he could possibly attend.
Over the past decade, CEOs championed the myth that they were responsible for the growing fortunes of their corporations, said Rakesh Khurana, assistant professor at Harvard Business School.
* Fantasies unchecked. For most people, fantasies are controlled by reality. But for some, the fantasies get out of control because there's nothing to stop them, said Levinson, the retired corporate psychologist.
Harvard Business School Professor Jay Lorsch is aghast over former Enron CEO Ken Lay's misuse of the company's corporate jet--he even reportedly used it to cart some of his daughter's personal furniture to France and back.
''The notion of 'irrational exuberance' isn't just in the stock market,'' Lorsch said. ''It created a culture of entitlement among many CEOs who lost their sense of proportions and began to do things that were ethically unwise, morally unchecked and illegal. They went nuts.''
* Society's blessing. Executives don't just wake up one day ''and become crooks,'' said Ron Shaich, CEO of Panera Bread. Instead, he said, ''They incrementalize themselves into it.''
The media, too, turned CEOs into heroes. Just months before he was arrested, Kozlowski was tapped by Business Week as one of the top 25 managers.
William George, former CEO of Medtronic, an outspoken critic of corporate greed, recalled meeting Kozlowski in 1998 to discuss a possible acquisition. ''In our brief meeting,'' George said, ''he bragged that having his headquarters in Bermuda enabled Tyco to avoid paying U.S. taxes.'' When George left the office, he recalled, ''I put my hand on my wallet and held on tight, telling my colleague to cancel further talks with Tyco.''
* Boredom. Working non-stop is the life's blood of many top CEOs. As a form of warped entertainment, those who are at the top--and have no further to go--will sometimes invent situations with very difficult obstacles to overcome. ''When Dennis Kozlowski fails to pay $1 million taxes on $13 million worth of art, it's because he's bored,'' USC instructor Berglas said.
* Power corrupts. At some point, some successful executives become unable to separate what is rightfully theirs and what is not, Yale's Sonnefeld said.
His favorite examples: Adelphia's John Rigas and Tyco's Kozlowski. ''They think they have a divine right to all that's around them. These executives grasp at any and all the symbols of success." But ultimately, he said, ''What they think is a badge of courage becomes a cloak of disgrace.''
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