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Hubris and the CEO: A Cautionary Tale

Wikipedia defines hubris as indicating "overweening pride, superciliousness, or arrogance, often resulting in fatal retribution or Nemesis". Hubris is an essential element of Shakesperean tragedy in which the protoganist over-steps divine or natural law and suffers for this pridefulness (Think Lear, Macbeth, Hamlet).

The whole idea came to mind watching the sad, and in this case possibly tragic (the words aren't  synonymous), events surrounding the former Ontario attorney-general Michael Bryant who was involved this week in an altercation in which a cyclist was apparently killed by Mr. Bryant's car.

It would be irresponsible to pass judgment on these events or on whether Mr. Bryant suffers from hubris. However, he has been the subject of a number of articles in the last few months in which he has been described, for example, as a "political rock star" with "an overstuffed closet full of accomplishments in which to drape himself: magna cum laude LLM from Harvard Law School, Fulbright Fellow, MPP at 33 and cabinet minister from 2003 until earlier this year." He has been congratulated on his pricey wardrobe and described as "dapper" and "intense".

Which means if he did listen to his own notices, to use the theatrical expression, it would not be surprising if he suffered from some sense of invincibility. And that, as the Greek tragedians would tell you, leads to retribution.

Turns out there is a recent study that suggests hubris and its retributive consequences were also present in CEOs who were found to have committed fraud.

Thanks to a blog for institutional investors called Pom Talk I was directed to a recent Canadian study titled Like Moths Attracted to Flames: Managerial Hubris and Financial Reporting Frauds. In it Michel Magnan of Concordia University in Montreal, Denis Cormier of UQAM and Pascale Lapointe-Antunes of Brock University suggest

"Taking a look at the size of management’s ego as a possible indicator of fraud. . . the authors suggest that egotistical managers, stoked by media attention and analyst praise, gain a 'feeling of invincibility' that leads them to 'take more risks in fraudulent activities,' akin to the 'moths attracted to the flames that ultimately kill them.'  The study also suggests that 'managerial hubris… ignites and accelerates the propensity of senior executives to commit or to be oblivious to fraud' and thus may just be the red flag that can effectively weed out the truly fraudulent operations from the non-fraudulent.  The authors opine that 'inconsistencies between executives’ statements and observable facts or realities, outlandish claims, and a lack of concern for operational detail can be signals that managerial hubris has set in.'"

Since many in-house and agency communications professionals help manage their CEO's public persona, and spend time urging reporters and bloggers to profile him or her, this is a cautionary report. Abetting journalists as they strain to make celebrities out of leaders, no matter how successful the person, has its risks. Too much stroking of the ego in public can lead to inspiring boldness . . . or reckless bravado. Let's think twice about pumping up the boss. Humility today is a more constructive -- and safer -- virtue.

 

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