Bill Cohan, author of “Money and Power: How Goldman Sachs Came to Rule the World” and Bloomberg View columnist asks, Did Psychopaths Take Over Wall Street Asylum?:It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm of our financial institutions are to blame.
Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”
As a result, Boddy argues in a recent issue of the Journal of Business Ethics, such people are “extraordinarily cold, much more calculating and ruthless towards others than most people are and therefore a menace to the companies they work for and to society.”
How do people with such obvious personality flaws make it to the top of seemingly successful corporations? Boddy says psychopaths take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.” Such circumstances allow them to ascend through a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders.”
Stable Environment
Until the last third of the 20th century, he writes, companies were mostly stable and slow to change. Lifetime employment was a reasonable expectation and people rose through the ranks.
This stable environment meant corporate psychopaths “would be noticeable and identifiable as undesirable managers because of their selfish egotistical personalities and other ethical defects.”
For Wall Street -- a rapidly changing and highly dynamic corporate environment if there ever was one, especially when the firms transformed themselves from private partnerships into public companies with quarterly reporting requirements -- the trouble started when these charmers made their way to corner offices of important financial institutions.
Then, according to Boddy’s “Corporate Psychopaths Theory of the Global Financial Crisis,” these men were “able to influence the moral climate of the whole organization” to wield “considerable power.”
They “largely caused the crisis” because their “single- minded pursuit of their own self-enrichment and self-aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”
Boddy doesn’t name names, but the type of personality he describes is recognizable to all from the financial crisis.
He says the unnamed “they” seem “to be unaffected” by the corporate collapses they cause. These psychopaths “present themselves as glibly unbothered by the chaos around them, unconcerned about those who have lost their jobs, savings and investments, and as lacking any regrets about what they have done. They cheerfully lie about their involvement in events, are very convincing in blaming others for what has happened and have no doubts about their own worth and value. They are happy to walk away from the economic disaster that they have managed to bring about, with huge payoffs and with new roles advising governments how to prevent such economic disasters.”
‘Reasoning Aptitudes’
In closing his short essay, Boddy recognizes that the theory is relatively untested and would benefit from “further development and research” into the “personalities and moral reasoning aptitudes of the leaders” of the companies that got into serious trouble in the financial crisis.
In an e-mail correspondence with me, he said his article has been warmly received and has been downloaded 9,440 times in the past 90 days. “Apparently this is a lot for an academic article and it is more than the next four most-downloaded papers combined,” he wrote.
He also has a prescription for how to prevent psychopaths from getting into positions of power on Wall Street and elsewhere.
“Anyone who makes decisions that affect significant numbers of other people, concerning issues of corporate social responsibility or toxic waste, for example, or concerning mass financial markets or mass employment, should be screened to make sure that they are, at the very least, not psychopaths and at most are actually people who care about others,” he wrote.
Makes sense to me.
Having dealt with my share of 'pension psychopaths' and other psychopaths on the buy and sell side in this industry, it makes perfect sense to me. It never ceases to amaze me how sneaky, slimy psychopathic weasels rise to the level of their incompetence. They really are snakes in a suit (many do not wear a suit and tie; some just wear a cardigan, lol).
Well, not always. Some organizations actually take great care to make sure they put the right person at the helm. Empathy is a quality that is not taught at business school, it's either in you or it isn't. Psychopaths lack empathy and they abound in all industries. They also abound in academia. Typically, these delusional fools suffer from narcissistic personality disorder, a condition in which people have an inflated sense of self-importance and an extreme preoccupation with themselves.
But I have a different theory on corporate psychopaths, one based on brain chemistry. My humble father, a psychiatrist with over 40 years experience with the most difficult mental illnesses, knows all about psychopathic traits. He's seen it all and he always warned me of the 'homo homini lupus' culture of the financial industry.
Will never forget the story he told me about a patient of his in the early 80s, a successful bond trader who was extremely depressed. My dad never provides details but he did tell me that this person was very anxious and depressed, unhappy in his marriage, calling his wife "the bitch". When my father asked him about his success as a bond trader, the patient just shrugged it off: "doctor, in this business, you're only as good as your last trade. The minute I stop producing, the sons of bitches will fire me."
My father ended up treating his depression but he always thought, and still thinks, this industry and corporations in general are full of psychopaths. "They take great pleasure in seeing others suffer. They think their penis grows two inches every time they fire someone." I chuckle every time he says that, like when someone speeds up to pass him when he is driving. "Bravo, you lunatic, your penis just grew two inches!". If it's a lady driving like a lunatic, he screams out: "donna volante, pericolo constante!"
But pension and penis envy aside, I know some leaders at large organizations, including public pension funds, display psychopathic traits -- impulsive, manipulative and lacking remorse -- and there is something seriously wrong with their brains. In fact, new research shows that criminal psychopaths may be victims of their own biology, and my theory is that many corporate leaders are victims of their own biology.
So for my Sunday special, I will leave these psychopaths, and others dealing with psychopaths, with some wise advice from Dr. Daniel Amen, a well known psychiatrist who you might have seen on PBS touting his secrets to change your brain, change your life.
I do not agree with everything the good doctor touts, but watch all seven parts below, guarantee you will discover something. Those of you with ADD should skip to the last clip where you'll see chunks of his advice without all the emotional pandering.
