Rowley Associates

President Obama’s decision to cap the pay of Chief Executives to help stimulate the economy caught my attention as an interesting commentary on leadership in the US. Now to my knowledge no psychological classification exists to explain the level of insanity required to run a major Fortune 500 Company but recent examples in the press indicate rampant narcissism and unbridled ambition to be two particular job prerequisites. For an example of this dysfunction look no further than the demands made by John Thain during the recent merger of Bank of America and Merrill. Thain expected a $40 million bonus for inking the deal. As a population, Chief Executives seem to have done pretty ‘well’ when compared to the average worker. Findings from the Congressional Research Service indicates that average pay for chief executives stood at 179 times the average worker pay in 2005.

Yet whilst many ‘Captains of Industry’ have been well compensated, they seem bankrupt when it comes to a deeper understanding of their actions. Research by Rowley Associates bears this out. When analyzing our leadership data on executives in the Fortune 500 we found they scored lowest on behaviors that measure self-awareness. And the item that scored the lowest of any on the survey (42 out of a possible 42), regardless of gender, ethnicity or tenure? It was: “is aware of how his or her behavior impacts others and can change it according to the person or situation”.

Looking at our data it’s no surprise that legislation was needed to curb executives’ financial appetites. Perhaps Obama’s next decision will be to insist leaders spend some time in self-reflection and coaching to help them understand the impact of their actions?

If you would like more information on the research Rowley Associates has conducted with Fortune 500 leaders email us at info@rowleyassoc.com.