The worst CEO of the year goes to the head of the Salgado family of Portugal, the kingpin of an interlocking and complex set of entities that controlled the second-biggest bank in Portugal — and brought it to bankruptcy. The bank’s first half loss this year was 3.6bn euros ($4.5bn), forcing the Portuguese government to inject 4.9bn euros ($6.1bn) into the bank as part of a restructuring that leaves Salgado, and many investors that went along with him, out in the cold. BES was partially owned by Espirito Santo International (ESI), a family-controlled corporation consisting of dozens of nonfinancial businesses that relied on bank profits for start-up cash and ongoing working capital. When the financial crisis hit, the bank’s ability to generate cash slowed, forcing Salgado to institute a variety of complex lending arrangements to prop up the empire. Debt at Rioforte, the privately-held company that controls family interests, ballooned to 2.9bn euros ($3.6bn). Its unaudited net assets as of 30 June were about 173.2m euros, [according to reports](http://www.wsj.com/articles/rioforte-sells-stake-in-espirito-santo-saude-to-chinas-fosun-1412938793). Rioforte filed for bankruptcy in October. Putting [250 family members](http://www.ft.com/intl/cms/s/0/a63a4a56-32c0-11e4-93c6-00144feabdc0.html#axzz3LvJn1BJH) into management and leadership jobs might make for grand family reunions, but it can hardly be justified on the basis of sound managerial practice and judgment. Salgado, and some other family members, lived like kings in large estates, unhindered by even the most rudimentary oversight of the bank. There are multiple ongoing investigations that are pinning the blame squarely on Salgado, who was forced out on 14 July. The [question of fraud](http://finance.yahoo.com/news/espirito-santo-chief-denies-wrongdoing-150843499.html;_ylt=A0LEVvmrMo5UIEcAOasPxQt) has been raised. Salgado, testifying at a parliamentary hearing earlier in December, blamed the Bank of Portugal for forcing BES into bankruptcy, asserting that the family hadn’t appropriated “a single penny”. It may be that there was no intent to defraud, and that Salgado, when faced with bad investments in a tough economy, was trying to keep it all afloat. However, the fact that ESI expanded so aggressively, relying on leverage so extensively, in a challenging economic environment, must be seen for what it is: bad management. These high-risk strategies could only work if all sorts of things went right, and it’s the job of a CEO to use sound judgment in managing the enterprise. That was not the case here. The record indicates a series of [bad judgment calls](http://www.reuters.com/article/2014/08/29/us-portugal-espiritosanto-family-idUSKBN0GT0R320140829): *Salgado made extensive use of off-balance sheet financing to keep ESI companies afloat, transactions that were not disclosed to investors. *The stake in BES was valued on the books of Salgado’s holding company at $2.7bn, when its market value at the time was $565m. *Salgado signed a letter to the Venezuela state oil company on BES letterhead guaranteeing the safety of their $365m bond investment in ESI, an act contrary to a central bank directive to not mix bank and family business (the guarantees were also not recorded in the bank’s account at the time, as required by law). In testimony to parliament earlier in December, Salgado blamed an accountant for hiding liabilities, but the CEO of Semapa, a company to which ESI was trying to sell bonds, [told the same commission](http://www.reuters.com/article/2014/12/11/portugal-bes-hearing-idUSL6N0TV1RU20141211) that "nothing was ever done without Salgado knowing". In the end, and in a remarkably similar fashion to [the worst CEO of 2013](http://www.bbc.com/capital/story/20131212-the-worst-ceos-of-2013), Eike Batista of Brazil, this remains a cautionary tale of the incredible power of hubris to destroy empires, and the reputations of those that created them. *To comment on this or any other story you have seen on BBC Capital, head to our [Facebook page](https://www.facebook.com/BBCCapital) or message us on [Twitter](https://www.twitter.com/bbc_capital).* (Patricia de Melo Moreira/AFP/Getty Images)