http://m.thetyee.ca/Opinion/2011/11/21/Corporate-Psychopaths/
This article details a publication made by a business professor on the role psychopaths played and still are playing in the financial meltdown. I've reposted the article for your convenience.
Looks like some key concepts are starting to become more mainstream. :D
This article details a publication made by a business professor on the role psychopaths played and still are playing in the financial meltdown. I've reposted the article for your convenience.
Given the state of the global economy, it
might not surprise you to learn that
psychopaths may be controlling the world.
Not violent criminals, but corporate
psychopaths who nonetheless have a
genetically-inherited biochemical
condition that prevents them from feeling
normal human empathy.
Scientific research is revealing that 21st
century financial institutions with a high
rate of turnover and expanding global
power have become highly attractive to
psychopathic individuals to enrich
themselves at the expense of others, and
the companies they work for.
A peer-reviewed theoretical paper from
2011 titled "The Corporate Psychopaths
Theory of the Global Financial Crisis"
details how highly-placed psychopaths in
the banking sector may have nearly
brought down the world economy
through their own inherent inability to
care about the consequences of their
actions.
The author of this paper, Clive Boddy,
previously of Nottingham Trent University,
believes this theory would go a long way
to explain how senior managers acted in
ways that were disastrous for the
institutions they worked for, the investors
they represented and the global economy
at large.
If true, this also means the astronomically
expensive public bailouts will not solve
the problem since many of the morally
impaired individuals who caused this mess
likely remain in positions of power. Worse,
they may be the same people advising
governments on how to resolve this crisis.
To tackle this problem, we must instead
examine this rare and curious condition,
and why recent corporate history may
have elevated precisely the wrong type of
people to positions of great power and
public trust.
Unfeeling, but not insane
Psychopathy should not be confused with
insanity. It is best described by Robert
Hare, global expert and psychologist, as
"emotional deafness" -- a biochemical
inability to experience normal feelings of
empathy for others.
This shark-like fixation on self-interest
means that psychopaths often feel a clear
detachment from other people, viewing
them more as sheep to be preyed upon
than fellow humans to relate to. For
instance, psychopaths in prison often use
group therapy sessions not as a healing
process, but as an opportunity to learn
how to simulate normal human emotions.
Studies on twins have revealed that
psychopathy shows a strong genetic
signature and there remains no effective
treatment. Recent research has linked the
condition to physical abnormalities in the
amygdala region of the brain.
Only a small subset of psychopaths
become the violent criminals so often
fictionalized in film. Most simply seek to
blend in and conceal their difference in
order to more effectively manipulate
others. This frightening condition has
existed throughout human history,
though likely in a marginal and socially
parasitic way.
While psychopaths are often portrayed by
Hollywood as brilliantly clever, a
hypothetical race of Hannibal Lecters
would likely perish since they lack the
ability to trust each other. Put another
way, the human race -- a relatively weak,
slow, hairless tropical primate -- has
succeeded so spectacularly in every
ecosystem on the planet not because we
are so bad, but because we are so good.
Most dangerous one per cent
The human ability to build social capital
means that people can co-operate and
trust each other. We can reliably predict
the behaviour of others even if we have
never met them. Social capital is the glue
that holds together our communities,
complex societies, large institutions and
the economy. The one and only
superpower possessed by psychopaths is
their ruthless ability to spend the social
capital created by others.
Scientists believe about one per cent of
the general population is psychopathic,
meaning there are more than three
million moral monsters amongst normal
United States citizens. There is emerging
evidence that this frequency increases
within the upper management of modern
corporations. This is not surprising since
personal ruthlessness and fixation on
personal power have become seen as
strong assets to large publicly traded
corporations (which some authors believe
have also become psychopathic).
However, appearance and performance
are two different things. While
psychopaths are often outwardly
charming and excellent self-promoters,
they are also typically terrible managers,
bullying co-workers and creating chaos to
conceal their behaviour.
When employed in senior levels, their
pathology also means they are
biochemically incapable of something they
are legally required to do: act in good
faith on behalf of other people. The
banking and corporate sector is built on
the ancient principle of fiduciary duty -- a
legal obligation to act in the best interest
of those whose money or property you
are entrusted with. Asking a psychopath
to do that is like recruiting a pyromaniac
to be a firefighter.
The folly of mixing psychopathy and
senior corporate management has been
borne out by recent history. At the end of
the last decade, numerous banking
institutions representing hundreds of
years of corporate financial stability
ceased to exist within a few short months
due to the reckless acts of a few
individuals -- none of whom have ever
been charged with a crime.
And therein lies the rub. As ruthless as
psychopaths are, their pathology dictates
that they will ultimately act to the
detriment of the organizations and
investors they are paid so well to
represent.
Fertile for pyschopaths: New corporate
culture
If this theory is correct, how did this
become such a crisis in recent decades?
Boddy suggests that corporations have
changed from relatively stable institutions
where psychopaths would have a difficult
time concealing themselves, to highly
fluid organizations where it is much easier
for them to disappear within the chaos in
their wake.
"(The) whole corporate and employment
environment changed from one that
would hold the Corporate Psychopath in
check to one where they could flourish
and advance relatively unopposed," Boddy
writes. "As evidence of this, senior level
remuneration and reward started to
increase more and more rapidly and
beyond all proportion to shop floor
incomes and a culture of greed unfettered
by conscience developed. Corporate
Psychopaths are ideally situated to prey
on such an environment and corporate
fraud, financial misrepresentation, greed
and misbehaviour went through the roof,
bringing down huge companies and
culminating in the Global Financial Crisis
that we are now in."
Boddy is not hopeful that the current
round of expensive public bailouts will
solve the problem. If psychopaths have in
fact installed themselves in the upper
reaches of the world's financial
institutions, their genetic deficiency
dictates that their greed knows no
bounds. They will continue to act in
antisocial, remorseless ways, amplified by
their enormous corporate influence until
the institutions they represent and
perhaps the entire global economy
collapses. Obviously, more academic
research in this area is urgently needed.
Boddy concludes his recent paper with
this grim prediction:
"Writing in 2005, this author... predicted
that the rise of Corporate Psychopaths
was a recipe for corporate and societal
disaster. This disaster has now happened
and is still happening. Across the western
world, the symptoms of the financial crisis
are now being treated. However, this
treatment of the symptoms will have little
effect because the root cause is not being
addressed. The very same Corporate
Psychopaths, who probably caused the
crisis by their self-seeking greed and
avarice, are now advising governments on
how to get out of the crisis. That this
involves paying themselves vast bonuses
in the midst of financial hardship for
many millions of others is symptomatic of
the problem. Further, if (this theory is
correct) then we are now far from the
end of the crisis. Indeed, it is only the end
of the beginning. Perhaps more than ever
before, the world needs corporate leaders
with a conscience... . Measures exist to
identify Corporate Psychopaths. Perhaps it
is time to use them."
Time has come for testing
Boddy's last statement contains a kernel
of hope. If our world has become chaotic
due to institutionalized psychopathy,
imagine how much better it could be if
such dangerously impaired individuals
were excluded from positions of power
and influence.
Precedence exists for dealing with such
situations. Randomized workplace drug
testing became the norm in the 1980s. At
the time, civil libertarians strongly
objected on the basis that it violated
personal privacy protections. However, the
U.S. Supreme Court decided in 1989 that
such testing was constitutional and now
about 25 per cent of Fortune 500
companies routinely require their
employees to submit to such tests.
Perhaps investors at major financial
institutions should require that senior
level managers submit to established tests
to ensure they are not psychopathic. This
is not an issue of civil liberties since the
precedent has already been well
established regarding drug impairment in
the workplace. Likewise, it is not a
regulatory issue since private shareholders
have every right to demand that
executives demonstrate they are not
biochemically impaired and therefore
unable to carry out their fiduciary duties
on behalf of investors. If corporate boards
are hiring psychopaths as executive
management, they are not carrying out
their due diligence and could be held
legally liable for their oversight.
Companies should also consider providing
employees with specific whistleblower
provisions to expose potential
psychopaths in the workplace. A 2010
study by Boddy showed that corporate
psychopaths caused more than one
quarter of all workplace bullying, though
they accounted for only one per cent of
the workforce.
Besides being traumatic and humiliating
to other workers, this bullying is also very
expensive. Boddy calculated that bullying
by corporate psychopaths cost companies
in the U.K. more than £3.5 billion per year
in lost productivity and attrition.
Extrapolating these results to the United
States, these deviant individuals are
responsible for more than $35 billion in
direct annual losses to U.S. businesses.
Politicians, too?
And what about elected officials? There is
no higher standard of trust in our society
than standing for public office.
Campaigning politicians are expected to
submit to almost absurd levels of scrutiny
about their private lives, character and
personal relationships. Should not
candidates begin providing voters proof
that they are medically capable of acting
in the interests of the public that may
elect them?
The Occupy Wall Street protesters
demanding an end to the reign of the
"one per cent" may have unwittingly
stumbled on the crux of the issue. Science
tells us that 99 per cent of humans have
normal emotional function. One per cent
are psychopaths. We ignore that truth at
our peril.
Looks like some key concepts are starting to become more mainstream. :D
