Companies are full of ambitious people willing to do anything to please people in power. Sometimes it's in order to advance their careers and harm, without remorse, the lives of anyone who gets in their way. 

Elizabeth Holmes dropped out of Stanford at age 19 to start Theranos which folded last September. This blood testing company--which claimed it could perform 1,000 blood tests from a single drop of blood--wiped out $900 million in investor money and endangered the lives of eight million people who used its service, according to a Vanity Fair interview with Bad Blood author John Carreyrou.

Billy McFarland is a 27-year-old serving a six year prison sentence which began last October after he pleaded guilty to charges of wire fraud in raising $26 million from investors for the Fyre Festival -- an over-hyped music festival in the Bahamas which was canceled on its first day, according to Business Insider.

I'm not an expert and cannot diagnose a psychopath. I'm not saying Elizabeth Holmes and Billy McFarland are psychopaths. Could their leadership styles and actions be categorized as psychopathic? University of Alabama researcher Peter Harms certainly thinks so. His colleague, Karen Landay, is less certain.

What Is a Psychopath?

Here's how to tell if your boss is a psychopath. As Landay told me in a February 20 interview, employees should look for the following behaviors:

  • Bullying. "Look for a pattern of aggressive actions, frequently targeted at specific individuals until they quit." 
  • Lack of empathy. "An inability to understand or empathize when people are hurting or vulnerable. Think of the boss who punishes workers for taking time off to attend a funeral for a parent or interact with a new-born child."
  • Volatility. "If a boss is extremely hostile one day and then chummy towards you the next, then they really don't understand how their behavior can negatively impact others and how such hostility can 'stick' with people even after it is over."

The line between a corporate jerk--someone who excels at kissing up and kicking down--and a psychopath is pretty clear. If you hurt other people and break the law without a tinge of remorse, you are over the line to psychopath.

How prevalent are psychopaths in the C-Suite? A 2016 study found that 21 percent of CEOs are psychopaths, compared to 1 percent in the general population, according to a 2016 paper in Crime Psychology Review. (Note: The paper has actually since been retracted, due to plagiarism claims.)

More recently, a 2018 study by Harms and Landay found that psychopathic CEOs are only slightly more common than they are in the general population--3 percent to 1 percent. Harms thinks that Holmes demonstrated psychopathic traits, at least based on accounts he's read in the media. As he recently told me:

"A willingness to and comfort with deceiving others to meet her own ends, aggressive bullying behavior towards subordinates, manipulativeness with regards to investors and professors she interacted with, and her lack of concern for the well-being of the people who used her faulty products and were given inaccurate diagnoses. What's maybe worse is that she enlisted so many people in her actions. She normalized deceitful behavior in her organization and corrupted those around her."

Landay wasn't willing to go that far, saying, "The fact that Theranos was so successful under her leadership for so long points to her as a potential outlier."

How to Keep Psychopaths From Becoming CEOs

If you're on a company's board, you can do something to stop psychopaths from becoming CEOs. If you're a CEO, you can do something to prevent hiring psychopaths as employees and leaders. Harms suggests four questions to constantly ask:

  • Do they produce high turnover? "If the people who work directly with them have or are quitting at abnormally high rates, then you most likely have an abuse problem."
  • Do peers and subordinates report abusive conduct? "Talk to their current subordinates and peers who must cope with the psychopathic behavior."
  • Do they mistreat treat powerless people? "Take them to a place where they can interact with people who have little power. We call this the 'see-how-they-treat-the-waiter test.' If they are rude, dismissive, hostile, and seek revenge for perceived slights, that is the real them." 
  • Do they lie on their resume? "Finally, do a very, very close check of what they say about themselves in their resume. Psychopaths are more than willing to lie about their credentials and will even argue if you challenge them with falsehoods that you find."

The same concepts apply, by the way, if you're an employee looking to join a new company. I think you should do similar due diligence in that scenario. That way, you can avoid having to deal with the pain caused by bosses with psychopathic tendencies.

Published on: Feb 22, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.