CEOs Anonymous

So far, 2002 has been a rough year for Drew Lewis, former chairman and CEO of Union Pacific Corp. Arrested for drunk driving last July-his second charge-the 70-year-old was sentenced on Jan. 11 to 30 days in jail, which he served in an alcohol treatment center, a $5,000 fine and 40 days of community service. He also had his driver’s license revoked for 23 months.

Perhaps more stinging than the particulars of his sentence, though, were the humiliating circumstances of his most recent episode: Lewis reportedly overturned his Lincoln Navigator while pulling out of his own driveway. When officers freed him from the car, he was tested and found to have a blood-alcohol content of 0.30 percent-three times the legal limit in Pennsylvania. CNN reported that, in an apologetic letter to the judge prior to sentencing, Lewis called the incident “a wake-up call I will never forget.”

For Lewis’ sake, one hopes it’s true. Sadly, his long, colorful career, which includes service as Secretary of Transportation under Ronald Reagan, has been peppered with similar reality checks. In 1994, while still CEO of Union Pacific, Lewis was given a five-week pass to an alcohol rehabilitation clinic, and was issued an ultimatum by his board: get help or don’t come back. Fourteen months later, he was arrested for driving while under the influence; the story made headlines in papers across the country. Lewis stayed on at Union Pacific until December 1996, when he retired as planned.

To those not familiar with alcoholism, Lewis’ lapses in sobriety might look like a case of poor will power or a lack of self-control. And few CEOs could imagine themselves winding up in his shoes. But according to the National Institute on Alcohol Abuse and Alcoholism, one in every 13 adults in the United States abuses alcohol or is an alcoholic. While no similar statistics are available on the number of CEOs diagnosed with the dependency, there’s no reason to believe that this disease-like diabetes or hypertension-does not pervade the CEO ranks just as it does any group, according to Dr. James Fearing, president and CEO of Minneapolis-based National Counseling Intervention Services. “It doesn’t matter who you are, where you come from, what level you’re at in the company, or how much money you have,” he says. “It’s an equal-opportunity disease.”

Fearing estimates that in 2001 alone, his firm, which coordinates executive interventions and counsels companies on workplace addiction, intervened in 25 to 50 C-suite-level cases, primarily in mid- and large-size companies. “Prior to the last three or four years, it might have been upper management, but not top management,” he says. “Now we’re doing more interventions in the board room.”

It’s not that executives are drinking more, he adds, but that those around them are more aware of the problem. CEO health has gained greater attention in recent years. And with boards increasingly independent and shareholders more vigilant, CEOs are more likely today to be called on the carpet for any behavior considered unhealthy.

But despite a greater willingness to confront CEOs, the problem is still kept quiet. Stereotypes and misconceptions about alcoholism abound, making it a dirty word inside and outside corporate board rooms. While a CEO might be admired informally for recognizing his or her problem and seeking help for it, Wall Street typically doesn’t applaud such candor and self-awareness. Over the years, a small handful of CEOs have gone public with their personal battles, but untold cases remain shuttered away, with boards, employees and CEOs themselves colluding to make addiction in the corner office one of the best-kept secrets in corporate America.

Denial: The CEO’s first line of defense
As most recovering alcoholics attest, recovery starts with the addict’s acknowledging the problem and admitting he or she needs help-a tall order for CEOs, who may be good at diagnosing problems within their companies, but are typically loathe to admit such weakness in themselves. Corporate culture itself helps to blur the line between social drinker and problem drinker. Five-martini lunches may be passé, but drinking is still prominent, particularly in industries such as advertising, entertainment and hospitality, according to Fearing. CEOs, like other executives, may see it as part of their job to have a few highballs at a business dinner or to let loose a bit at the company holiday party. Certainly, Southwest Airlines’ share price never suffered because of Herb Kelleher’s notorious Wild Turkey consumption; in fact, his party-boy image seemed only to endear him to employees and shareholders.

But experts say the stories of Kelleher’s drinking were more fable than fact and that if he were consuming as much as he claimed, he’d be in for a rude awakening. For most, the addiction develops gradually, and those afflicted may not notice it until it’s already a serious problem. Red McCombs, owner of the Minnesota Vikings and CEO of Red McCombs Enterprises, had his epiphany after 25 years of “moderate social drinking,” as he describes it. “I realized it had become a negative issue with me,” he says, “and it’s quite a depressing thought because you think, €˜this couldn’t happen to me.'”

He’s not alone. Sam Johnson, former CEO of consumer chemical products maker S.C. Johnson & Son, in his recently released autobiographical documentary, Carnauba: A Son’s Memoir, candidly describes coming to terms with his addiction. During a period of denial in the early ’90s, his wife and children pleaded with him to check into the Mayo Clinic to get help. Johnson refused twice before going. “I was struggling with that,” he told the Milwaukee Journal Sentinel last August. “I was chairman of the Mayo Clinic.”

Not surprisingly, the stereotypical images of addiction fail to line up with self-perceptions of successful corporate leaders. “We had one person who thought, €˜I only have a substance abuse problem if I end up living in a cardboard box and eating out of dumpsters,'” says Dr. Scott Stacy, director of psychological services at the Professional Renewal Center, a Lawrence, Kans.-based clinic that offers a treatment program for professionals called INSIGHT Executive Consultation Services. “€˜So since I’m not, therefore, I’m not a drunk.'”

Other negative, albeit less dramatic associations-weakness, helplessness-don’t sit well either. “Many CEOs want to be viewed as models of decisiveness and as being as totally together as possible, so it’s very difficult for them,” says Gene Morrissy, corporate psychologist with management consultancy RHR International. They also tend to hold themselves to inhumanly high standards, in part fueled by the expectations around them, adds Stacy. “There is a misconception that a strong leader has to be in control of everything,” he says. “If a CEO’s own life becomes unmanageable, the anxiety that goes along with admitting that can be very overwhelming. Some will do anything they can to avoid it.”

That includes hiding their habit from others. McCombs managed to get through years of drinking without arousing the suspicion or concern of family, friends or colleagues. “When you become addicted, you become very much aware that you shouldn’t show that in public places, so you become more and more of a closet drinker,” he explains. “It’s something you’re trying to hide.” But even without pressure from others, McCombs knew he had to quit. “Once you realize you’re hooked on a chemical, you have to find a way to get off of it because it’s so depressing that it’s hard to live with it unless you stay high.” After a year of praying for a way out, the answer arrived serendipitously: McCombs became ill with hepatitis and, through his hospitalization, detoxed. He’s been sober for 24 years. “I feel like, at age 50, God gave me a new life,” he says. “And it really energized me to realize I didn’t have to drink anymore.”

Intervention and counseling experts say that despite the fact that their performance is monitored, CEOs, isolated by power and position, have a relatively easy time concealing their addictions. “Generally speaking, there aren’t a whole lot of people willing to tell them the truth,” says Morrissy. “And in a situation like this, they may be even less likely to confront the issue. The CEO then becomes more isolated, which gives him or her more room to engage in that substance abuse.”

Clifton Morris, co-founder, chairman and former CEO of AmeriCredit, an auto finance company in Fort Worth, Tex., with $818 million in revenues, sums it up more bluntly. “It’s already lonely at the top. How is a CEO going to find anybody to talk to when he’s a drunk?”

Morris would know. Though he wasn’t a CEO yet, he had very few friends by the time he got sober in 1979. Even after he was fired in 1971 from his position as CFO of Service Corp. International, a Houston-based funeral services company he helped build, Morris still believed he could control his drinking. Eight years later he found himself living at the home of a waitress who served at the gin mill he frequented. By then he was in both physical and financial straits. “I had $13, 48 creditors, two default judgments, I weighed 140 pounds, and my liver weighed 40 pounds,” Morris recounts in his thick, southern drawl, “and yellow was not my most becoming color.”

Finally, one day, he was talking on the phone with the lawyer handling his third divorce, also a former fraternity brother from his university days. “He said, €˜Cliff, you have to check into a hospital.'” The next morning, he did. Since entering Alcoholics Anonymous, Morris hasn’t touched alcohol. “And my life has gotten better every single day for 23 years,” he says. Morris has always credited AA with his recovery, and he is such a strong believer in its principles that he patterned much of AmeriCredit’s corporate culture around them. He keeps a copy of the “Big Book”-a practical guide to AA’s 12-step program-on a shelf in his office in case he should come across someone who needs it.

Morris acknowledges that he had to hit bottom before he could seek help. But he adds that the interventions that have become more common today might have helped. “They weren’t even on the map when I got sober,” he says. “But they work. Because even if they don’t work, they ruin your drinking for sure.” Having the spotlight trained on the addiction drags the CEO out of denial. “You’ll never have another happy drink,” Morris promises.

Executive interventions: Raising the bottom
That’s what intervention specialists hope for when they convene groups to confront addicted professionals. It’s also what Fearing of National Counseling Intervention Services calls “raising the bottom” for troubled CEOs. “All interventions are successful in that they break through the conspiracy of silence,” he says. But the really successful interventions have to have some muscle behind them. That is, the team confronting the CEO must include colleagues he or she respects and admires, possibly family, and at least one board representative who has the power to unseat the CEO if he or she refuses treatment. The board has to have already considered the financial, operational and other implications of firing the chief, and has to be fully willing to make good on the threat.

That’s a more complicated choice in cases where the CEO still seems to be performing well-or when it’s not as clear that the situation is likely to worsen. A few years ago, Korn/Ferry International Vice Chairman Peter Crist got a call from a board member of a public company that had begun noticing their CEO was consuming a lot more alcohol than they thought appropriate. “They were struggling with this because, as a player, he was a very good CEO,” recalls Crist. “I basically advised them that there was little they could do at that time because there was no performance issue.” Over the course of the next year, however, as more incidences of excessive drinking were reported back to Crist, it became clear there was a problem and he recommended that the CEO’s closest friend on the board have a private conversation with him, which he did. About four or five months later, Crist learned that after several conversations, the CEO had decided to seek help.

Fearing calls those CEOs who continue to perform well with an addiction the “not-yets.” They don’t know yet that there’s a problem, he says. “But as the progressiveness of the illness takes its course, they will not be able to hide it.” For boards, the question becomes, how long should we wait?

In most cases, board members, who may themselves deny the problem exists, are not aware of all the risks involved in quietly hoping that the CEO sobers up and turns himself around. For one thing, a drinking CEO’s distraction can lead to decreased productivity among others, says Morrissy. And the accompanying moodiness or unpredictability can inhibit direct reports from consulting with him or her on important decisions. “They don’t know which CEO is going to show up on a given day,” says Morrissy. “So the CEO who is usually in a bubble is now in a bubble within a bubble.”

Add to that the exposure to lawsuits, from clients to shareholders to employees, and the costs start to add up, particularly when it takes only one incident of inappropriate behavior-say, sexual harassment or negligence-to tarnish a company’s reputation and cost it millions in damages. During a company holiday party, for example, the senior executive just under the CEO at a mid-sized Minneapolis company drank a few too many and began misbehaving. “He was in the copy room, of all places, and grabbed a woman,” recalls Fearing. “He was under the influence at the time, and she won the lawsuit for an awful lot of money.”

To avoid that kind of grief, National Counseling Intervention Services advises early confrontation-assuming enough hard evidence is on hand, because without proof, most CEOs won’t bite. When the president of one Midwestern company flatly denied having a problem with alcohol at his intervention, Fearing was ready with a list of specific incidents, including a report from the company’s banker that the president had been slurring his speech in a meeting, and of the president driving a company car while intoxicated. “So I was able to say, €˜Wait, let’s look at the facts.’ And once I did that, it changed the whole intervention from that point.” The president opted for a five-week treatment program and returned to his job.

Seeking treatment: Public or private affair?
Most treatment programs involve at least a four-week stay at a rehabilitation clinic, followed by a plan for ongoing treatment and support, including individual or peer group therapy. The company typically foots the clinic bill-usually sans insurance, lest there be a record of the treatment, says Fearing. Experts estimate the monthly cost at anywhere from $15,000 to $40,000, depending on the facility and length of stay. “That’s peanuts compared with how much it costs to bring in a new CEO,” says Stacy. “Particularly if that CEO is otherwise a very creative, dynamic leader.”

Figuring out creative ways to explain the CEO’s extended absence is another matter. Usually, the boss will be said to be “traveling on business” or vacationing, or both, says Fearing. But the company almost never reveals the truth. “I’ve gotten calls [from the press] regarding different cases and obviously I can’t even acknowledge that I know the person, much less what’s involved,” he adds.

The secrecy is certainly understandable. Companies and boards have enough to cope with in terms of financial performance without trying to explain away newly revealed liabilities in its leadership. And assuming the CEO returns, they don’t want his or her alcoholism to be a focus. They’re also not required by SEC rules to disclose personal illnesses-though they are vaguely directed to reveal information considered “material.”

To be sure, Union Pacific’s decision to go public with Lewis’ leave of absence when he entered treatment in 1994 was considered highly unusual-not to mention risky, given that the $15 billion railroad was right in the middle of a multi-billion-dollar bidding war with Burlington Northern over the acquisition of Santa Fe Pacific Corp. Their motives were never made public, but some speculated that UP’s board was attempting to head off rumors or prevent fallout in the event that the truth leaked out some other way. They may even have been influenced by events six months earlier, when a CEO’s addiction, previously undisclosed, made headlines when circumstances turned tragic. In May, 1994, Wardell Lazard, 44-year-old founder and CEO of W.R. Lazard & Co., was found dead of an accidental overdose of cocaine and alcohol, and the shocking news was ultimately a fatal blow for the investment bank, which was once the largest minority-owned underwriter in the country.

Board decisions aside, recovering CEOs themselves aren’t motivated to tell all, particularly when it seems those who have disclosed are dogged by the label throughout their careers. While no CEO search experts would go on record saying so, at least one admitted he would have to think twice about recommending a recovering alcoholic, however talented, for a top spot-not because he would doubt that candidate’s abilities, but because the stereotypes would cloud an otherwise positive story in the following day’s financial pages. Tyson Foods CEO John Tyson, who declined to be interviewed, will likely always face questions about his cocaine and alcohol addiction, no matter what other successes-or troubles, more recently-the company trumpets. Sam Johnson, too, has buttoned up, after revealing his story in his documentary; in declining an interview for this piece, his spokesperson said Johnson “feels he’s said all he needs to say about this topic.”

Some CEOs may remain quiet simply because the principles of AA demand anonymity, even among celebrities. Morris, for example, expressed serious concerns about violating that principle for this article, although he had already told his story in other regional publications. One concern expressed by advocates of anonymity is that addicts will be deterred from seeking help for fear their illness will be disclosed. Others worry that a public figure’s relapse, such as Lewis’, will raise doubts about the program’s effectiveness.

“But the public needs to be educated that relapse is a part of recovery,” says Professional Renewal Center’s Stacy. “It’s not a cure-all like an antibiotic. And if you’re hiding the fact that relapse is a possibility, you’re putting unrealistic expectations in people’s hearts and minds.”

It’s a big responsibility to come clean, he adds, but stereotypes fade only when truth is revealed, and, in this case, when more CEOs are willing to risk bad publicity to raise awareness about the disease. “The less mental illness and addiction issues are stigmatized, the better,” says Stacy, “and the easier it will be to have people get help without a tremendous amount of shame.”

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