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CEOs Gone Bad—What Do You Do?

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The Chief Executive Officer is supposed to set the tone for the whole company. He or she should embody all the virtues, vision, and high standards that make a business great. Sadly, this isn’t always the case. Instead, CEOs can be bullies, liars, frauds, and worse. According to the latest information from the Ethics Resource Center, only 4 out of 10 employees now report seeing misconduct on the job (55% reported observing misconduct in 2007). However, the amount of bad behavior is still directly correlated to status. The higher you go on the corporate food chain, the more rule breaking and unethical activity you encounter. How can you address this issue as an employee?

Assess Your Strategic Mechanisms

How people judge the behavior of a CEO varies greatly. The same things that you deem disruptive can be viewed as evidence of leadership to others. So it’s worth gathering intel from those that seem to be in favor with the CEO. Granted the individuals could be buddies, but they could have more skill navigating the minefield of when to speak up and when to go with the flow. As data points go, you can engage in conversations with these people and get a sense of how to pivot mentally around the CEO.

Furthermore, when it comes to thinking through things strategically, remember that it’s not about you, how you feel, or wishing the “bad” person would go away. You must treat your situation objectively searching simply for the leverage that allows you to do your job and get on with the business of taking care of business. People who fall prey to the victim mentality - hoping, coping, and compromising their way out of the emotional pit - won’t get out of it. Look ahead at the greater picture – what do you want to achieve, and what is the wicked problem you need to solve when it comes to dealing with the behavior? The framework you build in this manner informs the tactics you take.

Be Aware That the Board Might Care

According to a working paper published by the National Bureau of Economic Research, CEOs who engage in unethical conduct tend to be part of a sleazy culture that permeates the entire corporation. These CEOs are also more likely to get terminated than their ethical colleagues. These days, shareholders have a very low tolerance for leaders who misbehave. Consider becoming a shareholder to gain some access to decision making at this level. Seeing your face at the annual meeting might give a CEO pause the next time she thinks about bringing the hammer down on you.

Don’t Blow Your Lid

Above all, don’t wait until you feel like you can’t take it anymore before you act—that’s when people make rash decisions. Some workers use sites like Glassdoor to publicize awful behavior on the part of executives. When a company cares about its image, this might be one way to ensure that concerns are investigated instead of being ignored. If this is the only way you feel you can hold a bad CEO accountable, seek legal advice and then proceed with caution.

Also, remember that making defamatory (untrue or unprovable) statements that damage the reputation of a CEO or their company can lead to legal trouble. If you are going to blow the whistle, go through official channels whenever possible. At least you’ll have some legal protection rather than being left out in the cold.

Ask for Help

In the end, some behavior goes above and beyond any rational handling. Gross ethical violations or other personal and mental abuse that hugs or crosses over legal lines deserves an audience with those powerful enough to do something. This is not an easy task and groups like HR, Ethics Committee, or other bodies may or may not have enough power to make change happen.

If you face such a choice then go back to the strategic framework you created. An exit strategy may be the wisest choice when your reputation, financial basis and emotional basis are crippled or soon will be. Ultimately walking away should not be deemed as failure but rather correct for the situation at hand.

Fortunately in most cases, bad CEO behavior can be addressed like most poor behaviors in organizations whether it’s an employee or manager. Methods may vary depending on your personality or the personality of the individual in question, but a reasoned approach to options is likely to give you the path forward and allow you to retain both your sanity and your job.

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