Arrogance also threatens a CEO. Because I am CEO, I must know the business better than anyone else. It has been said but it just is not true. No CEO can be an expert in all functional areas. A CEO who is doing his/her job is spending time with the big picture. If he/she knows the details better than his/her employees he/she is either hiring the wrong people or spending his/her time at the wrong levels of the organization. It is appropriate for a CEO to manage operations if absolutely necessary, but he/she should quickly hire good operational managers and return to leading the whole business.

If he/she also comes to believe that the CEO title grants infallibility, watch out. Even the pope is only infallible a couple of times each century. But CEOs can reinforce their delusions of grandeur by giving themselves higher salaries (surely he/she deserves it! After all, salary benchmarks show how underpaid he/she is) and more perks. Then when layoffs come, the CEO wants applause for having the moral strength to make "hard choices," quietly overlooking how his/her own poor decision making led to the need for layoffs.