And yet, there are many complex aspects to any argument that some people should or should not get more than others. In addition to living in an egalitarian society, we live in a capitalist one. We believe that people should be rewarded differently, depending on the market value of the work they do, the services they provide or the assets they possess. By default, this means that some people will have more, get more, and be able to do more, than others.

We also believe in the American Dream, the idea that we have an inalienable right to build a prosperous life for ourselves, and pass on that prosperity and security to our children. Under such a system, is it possible or even rational to imagine each generation beginning its own journey from the same starting point?

As a society, we believe that some people are more talented than others and we applaud those capabilities and accomplishments. In our obsession with fame and uniqueness, we shine a bright light on such people, on and off the job, and treat them like modern day royalty. Whose fault is it that teachers and nurses don’t get celebrated and rewarded like pop stars and second basemen? It’s our fault. We don’t value those capabilities or services as much as we say that we should.

To an objective observer, the answer is clear. We make the decision to differentiate via the double standard every day. Should we be concerned at how large or shocking the gap between the elite few and the many becomes? It doesn’t make any rational sense, and yet the taboo remains. Is our reaction to the double standard an outmoded concern that should wither and disappear? Or is it a healthy way to keep in check the avarice and elitism inherent in our social system? Taboos can be rooted in superstition. They can also be functional, providing a necessary barrier to bad habits.

Is there any reason to believe that the taboo of the double standard has anegative or positive impact on our business leaders? On the one hand, we need to compensate and support our business leaders adequately because their talent is so rare and their value is so critical. On the other hand, human beings can be extremely sensitive to feelings of justice, fairness and equity. Peter Drucker, and other theorists, warned that in a healthy organization executive pay should not exceed that of average worker by more than four times. Yet, upward mobility is so much more available to all people these days. Perhaps the double standard provides a healthy incentive for entrepreneurial energy?

When it comes to special treatment in an organization, should it bother us that some people receive exceptions to the general rule? The treatment can be justified in terms of relative contributions. But what are the costs? Does the erosion of consistency carry with it a more significant burden than we may realize? Credibility is an important currency for leaders. One of our most powerful definitions of credibility can be summed up in the following way: A leader does what he says he will do. In other words, he walks the talk. If a leader proclaims that we must all tighten our belts to survive a rough period, and then continues to receive lavish treatment; or if a leader freezes bonuses but garners them himself; or if a leader transgresses on a core value that he has declared sacrosanct; isn’t his credibility greatly diminished in the eyes of his followers? On a personal level, a danger exists that special treatment can blind or protect a CEO from unwelcome but ultimately helpful data. Many times, I have been called in by a CEO to conduct extensive evaluations of that CEO’s top people, but been told by the CEO that he doesn’t need that kind of assessment himself. Is the CEO the best judge of that fact? Who is going to contradict him in an environment in which the double standard is the norm?

The debate remains open, the answers are murky and situational. The question for future leaders should be: Are you comfortable with the costs and benefits of operating under a double standard? The question for companies should be: Is your organization healthier without the double standard, or is it being put at a competitive disadvantage because of that aversion?

Anthony Smith is Co-Founder and a Managing Director of Leadership Research Institute and author of ESPN: The Company (Jossey-Bass, September 2009). He is also the author  The Taboos of Leadership: 10 Secrets No One Will Tell You about Leaders and What They Really Think (Jossey-Bass, May 2007). This article originally appeared in different form in his book, The Taboos of Leadership.

We are shocked and titillated with each new revelation. Several very public CEOs could be described as poster children for over-doing it. Take Dick Grasso, head of the New York Stock Exchange. On the one hand, Grasso was a true success story in the American mode. He started at the NYSE at an entry level position, working in the proverbial mail room, and climbed the ranks over the next thirty years until he reached the top position. From that leadership post, he oversaw the NYSE’s evolution through a period of tremendous technological change; he maintained public confidence in the capitalist shareholder system despite a wave of corporate accounting scandals and a sense of entrenched favoritism in the financial companies that create stock offerings; and he helped the organization literally survive the devastating terrorist attacks on the World Trade Center.

For all of these accomplishments and more, he was rewarded handsomely. When the extent of those rewards were revealed, he fell with a mighty thud.

The double standard taboo which got exposed in Grasso’s case was all the more electrifying because the NYSE is a non-profit organization. Although no one could ever imagine the beating heart of Wall Street functioning or even thinking like a non-profit in any ordinary sense, nevertheless, that word “non-profit” was repeated over and over in news reports discussing the “scandal.” It was as though Grasso, as leader of some charity like the United Way, had cooked the books and robbed donors blind at the expense of malnourished children in the third world!

The truth was somewhat different. Grasso’s compensation package was awarded to him by his board of directors. Yes, most of those board members had been appointed because of their support for and friendship with Grasso; but they also had impeccable credentials as leaders of the very institutions that Grasso was being paid to serve. To suggest that Grasso was caught with his hand in the cookie jar is a complete mischaracterization of what happened. Indeed, Grasso was operating completely within the boundaries of the rules by which he had played his entire life. But publicly, Grassohad broken a taboo.

Jack Welch, former CEO of GE, encountered a different aspect of the double standard taboo. Many would argue that Welch was the greatest CEO of the twentieth century. While he was overseeing GE’s phenomenal growth, no one complained about his compensation, nor called any aspect of it into question. During his messy divorce, however, details of his retirement package became public knowledge. In addition to a great deal more money than had been known about, Mr. Welch was also the beneficiary of a multi-million dollar Manhattan apartment and use of the corporate jet, among other surprises. Most shocking of all, Welch an extremely wealthy man, had his dry cleaning services covered, too.

To those already frothing about the excesses of double standards, this information was proof that even Saint Jack was corrupt. Why in Thomas Edison’s name should GE shareholders pay for Jack Welch’s dry cleaning when he no longer ran the company? In fact, Welch’s benefits were not out of line with what other CEO’s have typically received. More significant still, few of those other CEO’s have ever come close to producing the value that Welch created for shareholders. Indeed, the benefits of his leadership extended beyond GE, raising the bar for executive performance at companies everywhere. And yet, there was something about the idea of Jack Welch getting his dry cleaning expenses reimbursed which made people upset. Welch, unwittingly, had broken a taboo, and his luster was a touch less shiny as a result.

Anthony Smith is Co-Founder and a Managing Director of Leadership Research Institute and author of ESPN: The Company (Jossey-Bass, September 2009). He is also the author  The Taboos of Leadership: 10 Secrets No One Will Tell You about Leaders and What They Really Think (Jossey-Bass, May 2007). This article originally appeared in different form in his book, The Taboos of Leadership.

Is there any issue more toxic in today’s organizations than the notion of the double standard? It manifests itself most blatantly in terms of CEO pay, extravagant perks, and the kind of favoritism in which one set of standards is applied to top executives and another set to rank-and-file employees. When the economy is good, we tend to overlook such differentiation, comforted perhaps by the idea that a rising tide raises all boats. When the cycle turns, however, the resentment of unfair treatment brings a scrutiny of the double standard akin to a modern day witch hunt.

The taboo is simple: leaders should avoid any impression that they are the beneficiaries of special treatment. Our politicians are the most public demonstrators of this sensibility. Consider the 2004 presidential election between John Kerry and George Bush.  Both men came from privileged backgrounds, one merely very well-to-do, the other extremely wealthy. Both attended elite schools at every level of education, and received special treatment throughout their public and private careers by those who saw their tremendous potential. And yet, both also attempted to outdo one another in conveying an impression of being ordinary folk in touch with ordinary Americans. John Kerry’s political commercials focused on his humble beginnings and service to the American people, overlooking his marriage to a woman in command of a one billion dollar fortune. George Bush’s persona is a masterful display of common touch, and his speaking style demonstrates a bemused anti-elitism which many voters found comforting and refreshing.

Notice, too, that our business leaders, when writing their biographies or answering questions in interviews, tend to emphasize humble origins and everyday passions over anything which might strike people as being refined, privileged or rarefied. We prefer to think of our elite business people as the son of a mill worker or the child of the public school system, blessed by the fortunes of this great country. We prefer not to hear about the young man so obsessed with personal ambition that he worked hard enough to make it into an Ivy League school and gained access to elite connections which gave him a necessary foothold for later accomplishments.

The message leaders would like to convey through this reticence is that they are not recipients of special treatment and are, in fact, no different than the rest of us. At some level, they sense that the public’s attitude to the double standard is deeply negative. And yet, as with all taboos, there is a complicated set of emotions involved. As much as it likes to deplore double standards, the public is also fascinated by them. Consider our obsession with Hollywood stars and other members of the modern royalty. Not surprisingly, leaders also feel one way about double standards in private and another way on the record. In the gap between those two extremes, exists the electric nerve of the taboo.

Anthony Smith is Co-Founder and a Managing Director of Leadership Research Institute and author of ESPN: The Company (Jossey-Bass, September 2009). He is also the author  The Taboos of Leadership: 10 Secrets No One Will Tell You about Leaders and What They Really Think (Jossey-Bass, May 2007). This article originally appeared in different form in his book, The Taboos of Leadership.