Beware of charismatic leaders - they're much more susceptible to disastrous ethical lapses.

That's the warning from Marianne Jennings, professor of legal and ethical studies in the Department of Management at the W. P. Carey School of Business. The problem, she says, is that charismatic leaders surround themselves with sycophantic people so there's no reality check. Once that's in place, it's all downhill.

Jennings cites examples including Tyco International chairman and CEO Dennis Kozlowski who reportedly pocketed more than $150 million in unauthorized bonuses, and Razorfish co-founder Jeff Dachis who fell victim to his own hype.

Jennings has a point but I have to take it further. Her argument is fine but the fact remains that charismatic types also make great leaders because they have a vision and an ability to attract people.

In other words, they can take a group to dizzying heights or send it to hell. As Sigmund Freud wrote in his 1932 book Libidinal Types: "People belonging to this group impress others as being personalities. they are especially suited to act as support for others, to take on the role of leaders and to give a fresh stimulus to cultural development or to damage the established state of affairs."

Freud identified three types of personalities. First are the erotic types. These people are not so much focused on sex as they are on love and being loved. Think teachers, social and welfare workers, nurses, counsellors, occupational and speech therapists. Freud's second category were the obsessionals. Self-reliant, conservative and conscientious, they do everything by the book. Think accountants, middle managers and people who buy self-help books. Finally, there are the narcissists. Independent and not easily intimidated, they are aggressive can-do people who think for themselves and who are determined to blaze their own trails.

They also make the best leaders. Erotic types need too much approval, obsessives are better but they tend to be cautious. Narcissists, on the other hand, come closest to our collective image of great leaders because they can have a gripping vision of the company and they have the ability to attract followers.

The problem with narcissists is that things go off the rails when dissent and diversity of thinking are not tolerated. So there's no quick fix, apart from having a board of directors that keeps a watchful eye on the boss.