Corporate Accountability and WorkPlace  
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How to Stop Psychopath CEOs from Looting and Destroying Their Own Companies

There are ways to weed them out.

Have bankers gone psycho? It seems hardly a week passes without another  example of corporate fraud, rogue traders, rate fixing, and money laundering. Five years after the 2007 economic meltdown that wiped out $14 trillion of U.S. household wealth, the world's financiers seem to be behaving badly as ever and don't care who knows it. Perhaps expecting normal human behavior from many of these individuals is unrealistic because they are not normal -- they are psychopaths.

Corporate corruption linked to personal psychopathy presents both a problem and an opportunity. Rather than further futile efforts at regulation, solving the creditability crisis of global financial institutions may instead involve psychological screening to exclude certain individuals from occupying positions of trust they are medically unqualified for. And if so, cleansing of the capitalist Star Chamber will not be lead by government, but by the private insurance industry -- guided by the invisible hand of Adam Smith.

Let's start with the fascinating and frightening subject of  psychopathy. This condition is neither insanity nor a treatable mental illness. It is instead linked to physical abnormalities in the  amygdala region of the brain and is perhaps best described by experts as "emotional deafness." While psychopaths can often convincingly feign normal human reactions in order to manipulate others, inside they feel nothing but shark-like self-interest.

This ancient scourge has likely plagued humankind since the dawn of time, undermining our ability to trust each other and build cohesive societies. While sometimes glamourized by Hollywood as a super power, psychopathy shows little evidence of evolutionary advantage even though the condition has a strong  genetic signature. After 100,000 years of human history, only one percent of the general population exhibits this affliction -- indicating that it is more parasitic than powerful.

A threat that can be screened

Only recently have scientists developed reliable screening methods to reveal people with this emotional disability, and such tests have been widely adopted in the criminal justice system. And while our jails are filled with people exhibiting this frightening trait, Dr. Robert Hare, a leading researcher in the field warns, "not all psychopaths are in prison. Some are in the boardroom."

Some researchers have directly  linked the global financial crisis of 2007 to a growing prevalence of psychopaths in senior management of the financial sector. Dr. Clive Boddy believes that increasingly fluid corporate career paths have helped psychopaths conceal their disruptive workplace behavior and ascend to previously unattainable levels of authority. Boddy points out psychopaths are primarily attracted to money, status and power -- currently found in unparalleled abundance in the global banking sector. As if to prove the point, many of the world's money traders self identify as the  "masters of the universe."

What little research has been done in field indicates that individuals with psychopathic traits are  five times more common in senior management than the general population. And while psychopaths are tireless self-promoters, they are in fact poor performers and toxic managers. A  study by Dr. Paul Babiak of 203 senior managers found those with psychopathic scores on screening tests scored lower on leadership, team building, performance and effective management. They are also 25 times  more likely to engage in workplace bullying than normal humans.

How psychopaths get in

In spite of evidence to the contrary, employers often misjudge psychopaths as having strong characters that are "cool under fire." Babiak's study concluded, "our finding that some companies viewed psychopathic executives as having leadership potential, despite having negative performance reviews and low ratings on leadership and management by subordinates, is evidence of the ability of these individuals to manipulate decision makers. Their excellent communication and convincing lying skills, which together would have made them attractive hiring candidates in the first place, apparently continued to serve them well in furthering their careers."

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