When founders falter: A second-in-command attenuates the effect of founder identification on unethical...

Research on upper echelons theory often portrays founders as stewards who act in their organizations' best interests, requiring less oversight than hired executives. We challenge this view by examining a potential dark side of founder leadership: leader-directed unethical pro-organizational behavior, in which founders direct subordinates to engage in unethical actions to benefit the firm. Integrating social identity theory with social cognitive theory, we shed light on both when and why founder identification leads to this form of unethicality. Specifically, in the absence of effective corporate governance, singularly identified founders may develop a bottom-line mentality as they struggle for their organization to succeed. Subsequently, they may experience moral disengagement, leading them to rationalize directing subordinates to engage in questionable tactics. However, we argue that the presence of a "second-in-command" can act as a key safeguard that attenuates the relationship between founder identification and bottom-line mentality, thereby reducing founder moral disengagement and leader-directed unethical pro-organizational behavior. We find converging support for our hypothesized model using an archival panel data set as well as a three-wave field study of founders. (PsycInfo Database Record (c) 2026 APA, all rights reserved).