It’s the kind of headline that has the potential to destroy an organization.
In early June, Clyde Campbell, former CEO and managing director of Fiat Chrysler Australia, was accused of misappropriating more than $23 million US in company funds. It is believed he used the money for personal gratification, including trips, entertainment, memberships to exclusive golf clubs and marinas, renovations to personal residences and other luxury items like power yachts.
The allegations include concerns that Campbell had direct involvement as an owner or director, or was related to by family or friendship, of a number of contractors that received millions of dollars in payments for questionable or unnecessary work.
Even worse, it seems that Campbell’s extreme abuse of company funds was indicative of a culture of entitlement and misappropriation. It was also revealed that at least two other senior executives followed the example set by Campbell and misused company money for their personal enrichment.
Whenever a story like this arises, I always try to figure out what it was exactly that these people were thinking when they stole from and cheated the company that employed them? Seriously, could anyone actually justify this kind of bad behavior.
In my book, The Leadership Contract, I specifically discuss the need for all leaders to anticipate the temptations that come with the job: the power, the fame and, of course, the money. It takes a strong leader to negotiate all those fringe benefits and remain moral and ethical. Just as we’re seeing with Fiat Chrysler Australia, far too many leaders simply cannot resist taking more than they deserve.
It doesn’t always mean that these are bad people. In fact, throughout my interaction with business leaders I have found there are many instances where essentially good people come to author really bad behavior. These are people who simply could not resist temptation, and twisted their instincts about right and wrong to justify unethical or immoral acts.
It turns out that my anecdotal experiences have been substantiated by science. New research published by the Society for Personality and Social Psychology suggests that otherwise good people can do some pretty bad things if they are not prepared to deal with the temptations that come with leadership.
The authors of the research found that when someone anticipates temptation, and is reminded of the moral and ethical implications of doing a bad thing, they are much less likely to succumb.
The study focused its work on a study of nearly 200 business-school students, who participated in a mock real estate transaction involving historic properties. One group of students were put through a series of exercises to remind them of the need to preserve the historic properties, and the importance of not succumbing to unethical behavior. The other group were told it was representing a client that wanted to acquire the heritage property with the expressed purpose of demolishing it to build something new.
The results were quite clear. More than two thirds of the students who underwent no preparation lied about the real purpose behind the purchase of the heritage property; less than half of those who had been reminded about the moral and ethical imperatives of preserving the heritage property lied.
The study’s authors concluded that in the absence of specific warnings about the perils of temptation, human nature leads us to believe that it is okay to break the rules and do bad things. "Unethical behavior may not be experienced as something that needs to be resisted if people think it's socially acceptable or does not reflect on their moral self-image," the report stated.
What does this mean for leaders? Anytime you accept a leadership position, you need to cultivate a self-awareness and honesty that will allow you to anticipate those moments when you might get into trouble. Far too many leaders today accept their roles with arrogance instead of humility. As a result, they have given no thought to ethical and moral standards they might want to represent.
The key here is to accept right off the bat that you will face temptation. You will be afforded access to certain resources, and the power to make certain decisions, all of which could be opportunities for personal enrichment. If you know that these temptations exist at the outset, you will be better prepared to make the right decisions.
So take some time to pause and ask yourself what I call a leadership gut check questions:
• Am I prepared for the temptations that I may face in my leadership role?
• What are my weaknesses that can cause me to engage in bad behavior?
• How can I manage myself so that I don’t engage in unethical behavior?