Infection Point

Narcissistic leaders—you know the type. Their exploitative, self-absorbed behavior sets them apart from the charismatic, transformational leaders they can be confused with.

And now research shows they can infect organizational culture like a virus, leading to dramatically lower levels of collaboration and integrity at all levels—even after they’re gone.

“When narcissistic leaders undermine collaboration, they reduce the effectiveness of the organization,” says Prof. Jennifer Chatman.

Chatman and colleagues conducted experiments and a field study that included CEOs of major companies and found that narcissists don’t institutionalize collaborative and ethical behaviors. They often choose not to support pay equity or promote teamwork and civility, for example. And they often fail to sanction employees who violate shared norms.

Yet don’t bold leaders like Tesla’s Elon Musk or Apple’s Steve Jobs need to be narcissistic to launch visionary ventures? Definitely not, says Chatman. “You can have confidence and be innovative and not be self-involved, exploitative of others, and risk-insensitive,” she says. “Bill Gates is a perfect countervailing example.”

A board can mitigate damage from a toxic leader by basing a portion of compensation on the development of their people and rewarding collaboration, Chatman says.