The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, due out in 2013, won't include narcissistic personality disorder. According to prior editions, people with NPD display an overblown perception of their own importance, and an "extreme" preoccupation with themselves.
If mental health professionals no longer consider NPD pathological or destructive, shareholders and the general public may need to watch their backs, because self-serving CEOs with "me-first" attitudes could feel even less restrained to wreak havoc. These bosses aren't just badly behaved -- they're bad for business.
Disgrace under pressure
Shameful CEO misdeeds have filled news headlines for years now, with News Corp.'s (NYSE: NWS ) Rupert Murdoch only the latest example.
Even as the phone hacking scandal embroiling Murdoch's U.K. papers widens in scope, the media mogul barely seems to notice. Murdoch did get a pie in the face from "activist and comedian" Jonnie Marbles during his testimony to Great Britain's Parliament yesterday. But more importantly, he failed to take responsibility for what went terribly wrong at his company.
Murdoch spoke of "the most humble day of my life," but his actions didn't match up. He swiftly shifted blame for the scandal to his subordinates, and said he didn't plan to resign. "I feel that people I trusted -- I don't know who, on what level -- have let me down, and I think they have behaved disgracefully, and it's for them to pay," he said. "And I think, frankly, that I'm the best person to see it through."
Narcissist support group
Murdoch isn't the only company leader who has responded to major corporate disasters with a stunningly self-centered attitude.
Recall the catastrophic oil spill that slimed BP (NYSE: BP ) , last year, and former CEO Tony Hayward's equally ugly responses. During the crisis, Hayward infamously said he'd like his life back, wondered "what the hell did we do to deserve this?" and went off to a yacht race as oil gushed into the Gulf of Mexico and public outrage boiled.
A Bloomberg article also compared Murdoch's attitude to AIG's (NYSE: AIG ) Hank Greenberg. He presided over bad insurance bets that ultimately threatened the global financial system -- yet also claimed he was the "best person to fix" his company's problems.
I'd also add Lehman Brothers' Dick Fuld to the potential members of Wall Street's NPD support group. During Congressional hearings in October 2008, Fuld provided a litany of "not me" reasons for what went wrong at the company, including short sellers' rumors. He also said he would wonder "until the day they put me in the ground" why other financial companies received bailouts and his didn't. (Unlike Murdoch, Fuld didn't receive a pie in the face, but he reportedly did receive a punch in the face from a Lehman employee.)
Fuld also later denied any knowledge of employees' use of Repo 105 accounting trickery, which allegedly made Lehman's financial standing look far better than its grim reality.
Who suffers from this disorder?
Chief executives are more than willing to take credit for the positive outcomes like growth, appreciating share prices, and increasing shareholder value. And they're definitely willing to accept lavish paychecks for those accomplishments. But these days, too many CEOs are not equally willing to take responsibility for the negative events that occur on their watches.
Maybe narcissistic personality disorder's getting ousted from the DSM because those who suffer from it often don't really suffer. Everybody else does. In all the cases cited above, the disasters and scandals these CEOs unleashed or enabled hurt their employees, shareholders, reputations, and peers, not to mention the public at large.
Beware "me-only" mentalities among your companies' managers. If you don't, one day you could find your financial well-being on the line.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on environmental, social, and governance issues.