The dangerous doctrine of elite infallibility.

• Author: Kristie, James
• Position: Book it: Best bets for board reading

From Dead Companies Walking by Scott Fearon with Jesse Powell. Copyright [c] 2015 by Scott Fearon. Published by Palgrave Macmillan (www.palgrave.com).

One of the primary causes of unrealistic optimism in the corporate and investing worlds is an almost slavish faith in the capabilities of our country's elite. People seem to think that a degree from a top university inoculates its holder from failure. I can't tell you how many times stock analysts and fellow money managers have tried to convince me that a clearly troubled company would turn around simply because its CEO was a graduate of some distinguished school. "He's a Harvard MBA," they'll say in almost reverential tones, or, "He graduated cum laude from Princeton"--as if those facts alone would be enough to offset overwhelming evidence that, despite their impressive backgrounds, they were running their business straight into the ground.

Whenever I hear this special pleading, I think of a guy named Robert Jaedicke. He was an accounting professor at Stanford when I was an undergraduate there. Shortly after I graduated, he became the dean of the business school. He parlayed that prestigious position into a number of lucrative seats...