Every founder needs a second-in-command. Here’s why.

Theranos founder Elizabeth Holmes is in prison for defrauding investors. FTX founder Sam Bankman-Fried is serving 25 years for stealing customer funds. Adam Neumann, who founded WeWork, inflated his company to a $47 billion valuation through misleading financials and cult-like excess before it nearly collapsed. And Uber founder Travis Kalanick built the rideshare company into a global giant while fostering a culture of harassment and rule-breaking that forced him out.

These aren’t isolated bad apples.

Rather, a new study by researchers at UNC Kenan-Flagler Business School suggests they’re extreme versions of a pattern baked into the founder psyche.

Professor Bradley Hendricks worked with Travis Howell (PhD ‘20) and David Welsh, both professors at Arizona State University. Their findings are published in the Journal of Applied Psychology.

They showed founders are more likely than hired executives to direct employees toward unethical acts, including withholding information, exaggerating the truth or breaking rules, to advance the company.

Their research also points to a practical solution. Founder-led companies with a strong second-in-command — think a non-founder president or COO, the Sheryl Sandberg to Facebook’s Mark Zuckerberg — show significantly fewer ethical problems.

“In founder-led companies, directives can move quickly through the organization,” says Hendricks. “Founders have authority, they have charisma and things happen fast. Our research suggests that a capable second-in-command can slow that momentum, temper risky impulses and keep the company on course.”

The power of partnership

Using data from 504 public firms and surveys of 217 startup founders, the team found founder-led public companies displayed higher rates of fraud, corruption, toxic cultures and other harmful behaviors. But when a strong co-pilot was in place, these risks declined.

Not just any No. 2 will do, however. Success comes when these leaders translate founder ambitions into actionable plans and push back on damaging decisions before they cascade. Making these partnerships work requires intention from all sides, according to Hendricks. His team’s research offers concrete guidance for founders, boards and second-in-commands.

Founders: Watch for tunnel vision

Founders rarely intend to break laws or cross ethical lines, says Hendricks. But over time, they develop tunnel vision and questionable decisions can start feeling necessary for survival. The antidote is self-awareness: Founders need to know when to bring in someone they trust before a crisis hits.

Michael Dell recognized this need when he was 29. He hired Mort Topfer, a Motorola executive, as vice-chairman and as a mentor. Zuckerberg enlisted Sandberg when he was 23 and, by his own admission, “barely knew anything about running a company.” Sandberg became what observers called “the adult in the room,” professionalizing Facebook’s operations and pushing back on decisions about political content and misinformation.

“Trying to take everything on yourself leads to burnout — and burnout leads to bad decisions,” Hendricks says. “Sharing leadership and the load might prevent both.”

Boards: Install safeguards early

Boards face structural limits. Their oversight is intermittent, retrospective and filtered through what the CEO presents. Most consequential decisions happen far from the boardroom. Installing a strong deputy early provides continuous visibility and operational judgment that boards cannot deliver.

Oracle’s board learned this in the mid-1990s when the company flirted with bankruptcy under founder Larry Ellison’s leadership. The board pressed for Ray Lane of Booz Allen Hamilton as president and COO. “Whereas Larry was a visionary leader, the company needed more discipline in its operation,” Lane explained. The appointment turned around Oracle.

“Founders don’t always welcome a check on their power,” Hendricks says. “But that overlooks the need for embedded, day-to-day judgment. Boards should install it early, before problems force their hand.”

No. 2: Understand your role

Being second-in-command is a delicate balance. The role isn’t to micromanage or dilute the founder’s ambitions, but to challenge assumptions, surface blind spots, and step in when necessary.

For example, at Airbnb, Belinda Johnson pushed founder Brian Chesky to engage with regulators he instinctively avoided. “Growing up, I just assumed that when people don’t like you, you should avoid them,” Chesky said. “Belinda taught me better.”

A strong No. 2 must know when to support the founder’s instincts and when to slow them down, says Hendricks. “You’re not just serving the CEO. You report to the board and shareholders. Sometimes that means you have to be willing to stand up to the founder.”

There’s no one-size-fits-all formula. These partnerships demand clear roles, regular communication and mutual understanding.

“The same drive and vision that make founders remarkable can also make them risky,” says Hendricks. “Without a trusted partner close enough to say ‘no,’ even the most brilliant leader can become a cautionary tale.”