Sue CEOs for Malpractice?

Last Updated Nov 24, 2008 9:20 AM EST

When a surgeon operates on your left hip instead of the infected right one, chances are you'll consider bringing a malpractice action.

But what happens when a CEO pursues negligent actions that leave your retirement or mortgage at risk? Judging by recent history, the punishment is a lucrative buyout package and early retirement.

That's why Harvard Kennedy School's Barbara Kellerman argues that the aggrieved should be able to sue CEOs for malpractice. Writing in her Harvard Business Publishing blog, Kellerman intones:

Cuts in executive pay will not suffice to fix what's broken. Nor for that matter would leadership malpractice be a magic bullet. But sending the signal that leaders, like other professionals, can be sued for negligence, would deter bad behavior.
Read the entire blog for her views on why managerial malpractice is a good idea.

What think you? Should CEOs appointed by boards of directors be legally liable for non-criminal but professionally negligent decisions? Here are some factors to consider:

  • If you think ambulance-chasing lawyers suing doctors is over the top, can you imagine the legal circus surrounding malpractice attorneys going after CEOs?
  • Would chief executives and their employers have to take out malpractice insurance? Would that raise the cost of doing business?
  • How would CEO decision-making be effected? How would liability shape the way boards choose CEOs?
  • If we are inclined to think of management as a profession similar to doctors and lawyers, why shouldn't executives be held equally accountable?
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.