The Cost of Being Number One

August 30, 2013

From Dennis Quinn's Falls from Grace research

For centuries, it’s been thought that individuals with higher status have greater competence, stronger leadership, more compensation, less stress and increasing attractiveness than those of a lesser status. However, new research unveils the risk of having such a reputation and examines the costs of a ‘fall from grace’.

In the study, Falls from Grace and the Hazards of High Status: The 2009 British MP Expense Scandal and Its Impact on Parliamentary Elites, Georgetown University’s McDonough School of Business Professor Dennis Quinn and his co-authors found that people of high status are held to higher standards and are more scrutinized for the same behaviors as non-elites – becoming the target of media and receiving more negative press coverage.

Quinn and coauthors studied the effect of a scandal in May 2009 when confidential expense claims from Members of the British Parliament (MPs) were released by The Daily Telegraph. The claims reported expenses from MPs’ Additional Costs Allowances (ACA), an additional allowance that legally grants MPs reimbursement for expenses when traveling and second-home costs.

However, when ACA claims from 2004-2009 became public, some reports showed funds for horse manure, pornography, extravagant home remodeling and “moat cleaning”. British citizens revolted with nearly 90 percent expressing discontent with MPs with questionable expenses and 70 percent them to resign. In part as a result of the scandal, nearly one-third of sitting MPs left Parliament through resignation, retirement or electoral default.

Intrigued by the dangers and falls of elites from privileged positions, Quinn and coauthors investigated the roles of elite opportunism (elites over-exploiting their advantage through self-interested activities), elite targeting and press coverage in determining the career outcomes of the MPs.

By investigating pre-parliamentary status, examining five years of ACA expense behavior, pre-scandal press coverage and monitoring press coverage for one year after the scandal, the team studied the impact of each component on the likelihood of the MP’s survival through the next election.

Despite elite MPs being no more likely to abuse the expense system than non-elites, elite MPs still experienced more scandal press coverage and were held more accountable for their ACA expense behavior. This increased attention correlated to the likelihood of their exit from Parliament – confirming that elite targeting and press coverage were the ultimate influencers.

Furthermore, elite MPs with honors and awards were punished more severely for their misappropriation of ACA funds, received more scandal press coverage and were more than three times as likely to exit Parliament when expenses were considered egregious. A similar trend holds true within the United States, as 28 percent of superstar CEOs who won five or more awards eventually became fallen CEOs.

The findings of this study illustrate the power of the media to influence careers and perceptions of elites – as the dynamics of scandals are heavily shaped by how the media targets and construes elites’ transgressions.