Nissan CEO Carlos Ghosn charges a Nissan Leaf, the first mass-produced zero-emission vehicle.

by Gael O’Brien

Automotive superman Carlos Ghosn, who orchestrated the extraordinary turnaround that rescued Nissan from bankruptcy and architected the world’s largest automotive alliance, didn’t seem a likely candidate to underrepresent his income and commit other financial misconduct. And yet, he appears felled by kryptonite (or perhaps a coup).

Ghosn was unexpectedly arrested last month and occupies a cell in a Japanese Detention Center where he is expected to stay until December 10 when he will be formally charged or released. He has denied all allegations. The boards of Nissan and Mitsubishi Motors quickly removed him as chairman; Renault has temporarily replaced him as chairman and CEO; as of now, he remains chairman of the Renault-Nissan-Mitsubishi Alliance. His legal issues, or lack thereof, will be made clearer this month.

The disease and the bubble

However, Ghosn’s situation also spotlights leaders’ vulnerability to “CEO disease” and the “CEO bubble”. The vulnerability isn’t restricted to CEOs. The ailment has application to chairmen, CEOs and C-Suite executives. Psychologist Tasha Eurich says vulnerability to “CEO disease” occurs because “the higher you ascend on the corporate ladder the less self-aware you are.” Position and power are appropriate results of high achievers succeeding and bringing others along but there is a dark side that has already gotten too many leaders in trouble. Whether it is called a “bubble” or “disease” a leader is walled in by self-importance and isolated from needed information.

Former General Motors Vice Chairman Robert Lutz in a CNBC interview pointed out “that no CEO is immune to CEO disease.” Lutz identified some behaviors that he saw in Ghosn: “Since I’ve first known him, Carlos is a highly capable person of very, very high intelligence but also extremely aware of his own capabilities and his own importance.” Speaking more generally, Lutz indicated that CEOs tend to develop the opinion “…I am God’s gift to leadership and everybody loves me and I’m fabulous.” Eventually, CEOs, he added “tend to believe they are above the rules and above the law and then they start misbehaving.”

Knowing but not acting on pitfalls

Leaders know the many pitfalls in: 1) failing to cultivate their self-awareness; 2) not being transparent or diligent in seeing ethical consequences; 3) believing they’re the smartest person in the room; 4) allowing their image to get larger than life; 5) being isolated from negative feedback; 6) letting self-interest diminish focus on customer expectations; 7) not picking up or addressing concerns of their board, team or other stakeholders; and 8) treating entitlement as their due. However, knowing the pitfalls is clearly not enough. It is self-sabotage, especially doing business in an unpredictable multi-cultural world, for a leader to assume “I’ve got this.” They need to take to heart that leadership must evolve from the inside out; and build into how they show up, and what they stand for, safeguards that support them in averting potential torpedoes to trust, integrity, resolving conflict and ethical considerations in decision making.

As an aside, Facebook COO Sheryl Sandberg could have alleviated ongoing problems in her areas of responsibility  and Facebook’s fumbles if she’d focused sooner on addressing stakeholder expectations for privacy, seeking out negative feedback and identifying ethical considerations in potential decisions.

Since Ghosn’s arrest, stories have surfaced about his abrasive management style and his assuming too much power and credit, as well as his lifestyle and behavior contrary to traditional Japanese culture. His awareness of these tensions apparently wasn’t triggered, which cost him support among people he worked alongside at Nissan.

Monarchs and Ancient Romans

An ominous example of his being larger than life was renting part of the Palace of Versailles last year for a lavish celebration of his wedding and wife’s birthday. Town and Country Magazine’s headline was “Carole and Carlos Ghosn Threw a Wedding Fit for a King and Queen.”

It reminded me of the 2001 Roman Toga birthday extravaganza former Tyco CEO Dennis Kozlowski threw for his former wife in Sardinia. Kozlowski later spent nearly seven years in prison for tax fraud and misuse of corporate funds. At his 2013 parole board hearing. Kozlowski said, “I fell into what I can best describe as a CEO bubble, and I rationalized that I was more valuable than I was.”

Being purposeful

Being purposeful about cultivating self-awareness (which I talked about in a previous column) is the greatest asset a leader can foster to avoid self-sabotage. Also, challenging ourselves with questions tells us if we’re locked into the “rightness” of our own ideas. “Bursting the CEO Bubble” offers a number of questions to expand thinking, including “how often do you talk with people who make you uncomfortable?”

Being purposeful about avoiding the pull into celebrity status allows a leader to stay grounded, essential for enduring success. Having worked so hard to reach a success, celebrity can feel a deserved reward. And yet, becoming “larger than life” disrupts the core connections leaders need to keep success going. Some examples:

The vulnerability of Sandberg and Zuckerberg to the further perils of “CEO disease” may be alleviated by spending more time hanging out with one of Facebook’s own board members, Sue Desmond-Hellman, CEO of the Bill & Melinda Gates Foundation. Desmond-Hellman has mentioned in interviews her focus on avoiding “CEO disease” and life revolving around her. She acknowledged she works on it — being aware, encouraging people to tell her the truth and inviting questions and feedback.

Photo of Carlos Ghosn via Wikimedia Commons.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics, is a Kallman Executive Fellow, Hoffman Center for Business Ethics, Bentley University and Senior Fellow for Social Innovation at the Lewis Institute, Babson College.