5 Reasons Executives Aren't Good People

PORTLAND, Ore. (TheStreet) -- The nation's business executives would like you to know that they're feeling much better about the state of things and are ready to invest more into building the economy and creating jobs.

Whether that helps their post-recession reputation or even makes them better people in the eyes of the general public remains to be seen.

The AICPA Economic Outlook Survey, which polls chief executives, chief financial officers, controllers and certified public accountants with executive roles in U.S. companies, found that businesses expect an uptick in recruitment, staff training and spending in the next 12 months as economic conditions improve. Most of the execs questioned (56%) say their companies have the right number of employees, but 15% said they planned to hire immediately, up from 13% last year. Meanwhile the portion of those surveyed who said their companies had too many employees shrank from 10% to 8%.

Executives aren't easily covered with blanket statements and are an ill fit for generalized praise or barbs. For every archetype of the soulless job slasher who floated through the economic crisis on a generous compensation package, there are those that weathered the storm, kept people on and struck a balance between the bottom line and their base existence as a human being.

It's that basic humanity that becomes part of the problem, especially when dealing with a general public that doesn't share the Type A+ personality of their bosses in the upper echelons and judges them harshly for it during tough economic times. The way executives have answered surveys in the wake of the recession and during a period of uneasy recovery also hasn't helped their bid to humanize themselves to the masses.

In fact, based on executives' own survey responses, they may be getting worse at basic human interaction as the economy improves. Though many of these examples are exceptions rather than the rule, they're not exactly erasing the images of Ken Lay, Dennis Kozlowski, Bernie Ebbers, John Rigas or even Dick Fuld as the face of executive privilege over the past decade or so. Here are just a few reasons the public at large may still hold the nation's executives in contempt:


5. They don't know what they're doing

Just about the worst thing employees and customers can say about top executives is that they are incompetent or, at the very least, in over their heads. It dispenses with pithy personal attacks on character and makes the criticism about their ability to do the job itself.

It's even worse when those critics are right.

A survey conducted last year by global management consulting firm Booz Allen -- before Edward Snowden gave them some unwanted notoriety -- found that executives largely believed the job was out of their hands and that they couldn't help their company achieve its goals. A full 64% said they had conflicting priorities, while 54%, said they dont believe that employees and customers understand their strategy.

OK, so they don't know what they're trying to accomplish and don't know how to explain that to anyone outside the C-suite. At least they're uniting with their fellow Chief Insert Title Heres to push through all that and help the company succeed, right? Nope. Only 20% said they think their company has a "right to win" in all the markets where it competes.

That's grim news for companies where executives' capabilities in no way support the strategy, however jumbled. In that scenario, only 14% of such firms report above-average growth. It's particularly vexing when a solid 64% of managers don't feel their company's strategy will lead to success.

Remember when JCPenney started just throwing ideas at the wall before throwing then-CEO Ron Johnson under the bus? That's perhaps the best illustration of all of the above and a big reason folks who work for such executives lack faith in their abilites.


4. They're unethical

There were few big fans of large-scale financial institutions immediately after the financial crisis, but the executives steering the institutions that weathered the storm didn't do much to change people's minds.

A study released last year by the Economist Intelligence Unit titled A Crisis of Culture: Valuing Ethics and Knowledge in Financial Services found that a whole bunch of executives in the financial services industry didn't see much to gain by conducting their business ethically.

Although 91% of those surveyed placed equal importance on ethical behavior and financial success, more than half (53%) think advancing their career would be difficult without being flexible on ethical standards. Only 37% believe their firms performance would improve if employees acted in a more ethical manner.

While 97% of of those same executives feel qualified to handle their job -- and 67% have raised awareness of the importance of ethics at their firms -- 62% of financial executives admit they care very little about what goes on in departments beyond their own. That alone should set off alarms, but many of those same execs think their own departments are an ethical breach waiting to happen.

A full 60% of financial executives say gaps in their employees' knowledge of ethics is a significant risk for their firm. Meanwhile, 59% of financial executives agree improving knowledge of the industry as a whole would help make their firm more resilient, though 12% say they are confident in their knowledge of global regulations.

While it may be a leap to apply these findings more broadly to other industries, it's somewhat less of a stretch to say that executives having an ethical coin-toss with the world's financial system is enough cause for concern.

3. They're sexist


Harvard Business School, which has produced enough executives to weigh in on the topic, found that executives not only aren't big believers in work-life balance, but believe that finding it equates to women's work.

That wasn't just the male execs talking, either. Harvard Business School professor Boris Groysberg and research associate Robin Abrahams flipped through interviews of nearly 4,000 C-suite executives conducted by HBS students between 2008 and 2013. Of those executives, 44% were women.

The men relish the "breadwinner" role, brag about the merits of spending 10 minutes with their kids each night and have no problem lumping parental duties on a stay-at-home wife. The women, meanwhile, talk about hiring help to look after their children and "the guilt of missing out." It's why the women interviewed were more likely to say they'd put off marriage and children entirely to avoid the conflict.

As a result, 88% of male execs were married, compared with 70% of women. A full 60% of male execs had spoused who don't work full-time outside of the home, while only 10% of women did. The men averaged more than two kids apiece, the women 1.6.

In both cases, the executives saw work-life balance as women's work. Each side found it inconceivable that a man could pick up the slack, address work-life conflicts and actually contribute something other than money to the household. As The Atlantic pointed out last year, the amount of stay-at-home dads has doubled since 1994, but still exist among only 0.8% of married couples with children. Also, in two-parent households where women work, the percentage of fathers functioning as the primary caregiver to their children fell from nearly 13% in 1997 to 9.5% in 2011.

At least the Harvard students interviewing these parents were aghast at the results. Their firm disagreement about executives leading balanced lives bodes well for the C-suites of the future.

2. They're psychopaths

OK, maybe not all of them, but about four times as many as the general population.

Psychologist Paul Babiak studied 111-point questionnaires filled out by more than 200 executives and found that almost 4% of those surveyed were considered psychopaths when ranked on the Psychopathy Checklist, which therapists use to assess the personality disorder. Babiak included the findings in his book, Snakes in Suits: When Psychopaths Go to Work, and found that in comparison, only 1% of the general population exhibits psychopathic tendencies.

Basically, they lack empathy and show no remorse for their actions, but disguise the condition by hiding behind their status, turning on the charm and by manipulating or mimicking others. With a happy, well-adjusted childhoods, such psychopaths can function in a workplace rather than channelling their energies in more violent or destructive ways.

Their condition actually makes them terrible managers, but makes it easy to cover that weaknesses with charm and convince both superiors and subordinates that they're not so bad after all. There's very little separating a talented team leader from a psychopath, which is worth remembering at the next shareholders' meeting or conference.


1. They're not going anywhere

The key reason executives can get away with everything we've listed to this point is that companies have little choice but to keep them.

Their compensation packages are bulky, their contracts are locked tight and their employers are less prepared to jettison them than even their toughest critics might think. A survey conducted last year by IIC Partners revealed that one in every five executives surveyed couldn't be displaced in less than a year.

About 16% said their company didn't have a succession plan in place and that it would take up to three years to find their replacement. Another 4% said it would take a company even more time than that to come up with a suitable candidate for their job.

That situation becomes more acute for not-for profit firms -- 40% of which would have to take up to a year to replace an executive -- and is similarly trying for family-owned businesses. With that kind of security and just about no safety net for the companies employing them, why wouldn't executives just keep working with complete abandon?

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

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