MANAGEMENT: Recession, plunging share prices and Enron saga have taken their toll on company leaders' hero status

April 2002 may go down as the month when the last vestiges of the cult of the heroic chief executive were erased. In the space of a few weeks, a panoply of once-mighty corporate titans has been laid low.

Mr Dennis Kozlowski, chief executive of Tyco, was forced to make a humiliating public admission that he erred in proposing the break-up of the conglomerate he built with a string of takeovers.

Shareholders in Vivendi Universal criticised a €2 billion executive option plan that could have further enriched Mr Jean-Marie Messier, the media group's chief executive and architect of its high-profile expansion strategy.

And in the biggest cataclysm of all, Mr Bernie Ebbers was obliged to step down as chairman and chief executive of WorldCom, the acquisitive telecommunications group that he co-founded, last week.

All three are victims of the recent steep decline in the stock price of the companies with which they were identified. But the humbling of the hero-chief executives really began at least two years ago, when the markets turned against fast-growth companies.

The trend was accelerated by recession and given the coup de grace by last year's collapse of Enron. The energy trader's sudden decline into bankruptcy prompted an even more acute re-examination of corporate reputations, tarnishing the likes of Mr Percy Barnevik, former head of ABB, criticised for the scale of his pension benefits.

The process has even touched icons such as Mr Jack Welch, who retired as chairman and chief executive of General Electric last September, and Mr Lou Gerstner, who quit at International Business Machines in March. Even if Mr Welch and Mr Gerstner are no longer running companies, short- sellers, long-time sceptics and analysts - from the media to Wall Street - are chipping away at their corporate legacies.

"There really are no heroic CEOs out there now," says Ms Leslie Gaines-Ross, chief knowledge and research officer at Burson-Marsteller, the big public relations firm. She conducted a survey last year that concluded that the chief executive's image accounted for nearly half the reputation of a company's brand.

Asked whether the cult of the CEO was over, Mr Welch retorted that the question should be put to editors of the Financial Times, the Wall Street Journal, Business Week and other business publications, "because they created it".

But what makes this more than a familiar story of media hype followed by media backlash is that the collapse of chief executive-worship is accompanied by heavyweight demands that companies should rein in some of the excesses of the boom years, from lack of supervision to lavish pay.

"I just think the compensation has gotten so out of whack," says Mr Paul Volcker, the former Federal Reserve chairman. "Even apart from those extreme cases like Enron and Global Crossing (a telecoms group now in Chapter 11), they are getting paid hundreds of millions of dollars in the year the company goes bankrupt."

The same investors who backed charismatic corporate leaders when the world economy was expanding are now asking for a more sober approach. Boards are giving chief executives less freedom of action. Regulators are clamping down on abuses and drafting new rules.

Speaking about the impact of the Enron crisis in the boardroom, Ms Barbara Hackman Franklin, a former US commerce secretary and director of companies including Dow Chemical and Aetna, the health insurer, said directors' behaviour had already changed. "People are becoming much more vigilant, independent, more proactive," she said.

Gerry Roche, the veteran headhunter with Heidrick & Struggles, says "everything is being looked at with greater diligence than before - that's the sea change. And frankly it does have somewhat of a negative impact on CEOs and boards, who say: 'Boy, it's almost as if we've been tarnished . . . by the 2, 3 or 4 per cent who've done bad things'."

He lauds, in particular, those thousands of corporate leaders who never seek attention; and the steady, unglamorous performance of leaders such as Mr Ralph Larsen, who has just stepped down after a successful tenure as chief executive of Johnson & Johnson, the pharmaceuticals company. Most chief executives are "goddam heroes", he says.

With their reputations and companies under attack, even strong-willed chief executives, such as Tyco's Mr Kozlowski, have been forced to apologise for errors. Recently, David Komansky of Merrill Lynch told shareholders at the broker's annual meeting that he was sorry about the behaviour of the firm's internet analysts, who sent e-mails privately disparaging companies that Merrill was recommending to its clients.

The rise and crashing fall of many high-profile executives of the 1990s may also conceal a more subtle change in big corporations. Leadership is becoming more collaborative. Even Jack Welch says in the epilogue to his recent book that in future "no leader will be able to hoard the facts that once made the corner office so powerful".

So the next time executives begin to boast about their achievements and the media promote them as smart, attractive and richly talented - or denigrate them as dumb, incompetent and avaricious - investors would do well to remember that the truth probably lies somewhere between the two.