“It’s conventional wisdom in business circles today that corporate directors should “maximize shareholder value.” Corporations supposedly exist to serve shareholders’ interests, and not (or at least, not directly) those of executives, employees, customers, or the community. However, this shareholder-value dogma begs a fundamental question. What, exactly, do shareholders value?
Most shareholder-value advocates assume that shareholders care only about their own wealth. But it is increasingly accepted that the homo economicus model of purely selfish behavior doesn’t always apply. This possibility provides a challenge to the dominant business paradigm of “maximizing shareholder value:” the concept of the prosocial shareholder.”
Summary by J. Scarlet
From the books, Snakes in Suits by Dr. Paul Babiak & Dr. Robert Hare, Corporate Psychopaths by Dr. Clive Boddy, Working with Monsters by Dr. John Clarke & Without Conscience by Dr. Robert Hare
“It is important to study [corporate] psychopaths because of the large-scale financial, environmental and human resources that many modern international corporations have at their disposal. Many corporations are bigger financially than some nation-states: of the 100 largest economic entities in 2002, 50% were corporations,” (Boddy, 6). The actions of some senior managers have destroyed corporations and such collapses have become more common in recent years, (1). When these managers lie about their involvement in such catastrophes, walk away with huge payoffs and seemingly unaffected by the lives they have devastated, normal people wonder what kind of person would behave this way. It is my hope that by compiling this paper the reader will understand the traits of corporate psychopathy and why it is important that employers screen for them.
Dr. Robert Hare states that a portion of the PCL-R (Psychopathy Checklist-Revised), which was created to detect violent criminal psychopaths, also identifies corporate psychopaths, (Boddy, 7). According to Dr. Hare, corporate psychopaths are glib, superficially charming, have a grandiose sense of self-worth, are pathological liars, conning, manipulative, lack remorse, are emotionally shallow, callous, lack empathy, and fail to take responsibility for their actions, (39). He believes that criminal and anti-social definitions of psychopathy are inappropriate for corporate psychopaths so a revised definition should be used to detect them.
All psychopaths thrive off of the feelings of power and control they get from dominating their victims, but corporate psychopaths victimize people in primarily psychological ways, (Clarke, 10). They seek out leadership positions because money, power, status and control are what make them tick, (Boddy, 5). “Some psychopaths are violent and end up in jail; others forge careers in corporations.” (1).
Corporate psychopaths can control their behavior and that of others much more effectively than violent criminal psychopaths can, (Boddy, 42). Although they appear charming, charismatic and likeable, corporate psychopaths are emotionally disconnected to others, viewing them as objects to be used, (2). Of their psychopathic traits, the least noticeable are their manipulative behaviors and callousness, (42).
It is not difficult for these psychopaths to rise to very high levels in corporations, particularly in today’s uncertain and constantly changing corporate climates, (Clarke, 10). There are actually three and a half times more psychopaths in senior managerial positions than there are in the general population, (Boddy, 104). The managerial positions they move into exceed their abilities, but they are able to attain these positions because of the false personas they create, (3). Corporate psychopaths masterfully fool others into believing they are talented and trustworthy, but in reality their behavior is extremely destructive, (2).
According to studies conducted by Dr. Clive Boddy, corporate psychopaths accounted for 26% of workplace bullying, (Boddy, 44). When they were present in an organization, 93.3% of the employees witnessed bullying in the workplace, (60). When they were not present, the percentage was 54.7%. Not all corporate psychopaths are bullies, but the ones who are tend to be more abusive than charming, (Babiak & Hare, 187). They humiliate, intimidate, harass and scare their victims, and will become vindictive if they don’t get what they want, (Boddy, 44). They also encourage others to act these ways and such behaviors can spread through companies like a virus, (59). “Employees who worked in organizations where corporate psychopaths were present experienced people yelling at them at work more than five times more frequently than did employees who worked in organizations where corporate psychopaths were not present,” (58).
Unethical leaders create unethical followers, which in turn create unethical companies and society suffers as a result, (Boddy, 169). The more corporate psychopaths there are in a corporation, the less the corporation is socially responsible, environmentally friendly, beneficial to the community, and committed to its employees, (69). Based on his research, Dr. Boddy developed the Corporate Psychopaths Theory of the Global Financial Crisis: that corporate psychopaths, rising to senior positions within corporations, where they have considerable power and influence over the climates of the organizations have largely caused the financial crisis we are experiencing today, (164).
As Dr. Hare states in his book, Without Conscience, “If we can’t spot them, we are doomed to be their victims, both as individuals and as a society,” (Hare, 6). Dr. Hare teamed up with Dr. Paul Babiak to develop the B Scan, a diagnostic tool used to screen for dysfunctional behavior in organizations. More information can be found at http://www.b-scan.com/.
One out of every 10 Wall Street employees is likely a clinical psychopath, writes journalist Sherree DeCovny in an upcoming issue of the trade publication CFA Magazine (subscription required). In the general population the rate is closer to one percent.
“A financial psychopath can present as a perfect well-rounded job candidate, CEO, manager, co-worker, and team member because their destructive characteristics are practically invisible,” writes DeCovny, who pulls together research from several psychologists for her story, which helpfully suggests that financial firms carefully screen out extreme psychopaths in hiring. (click to view)
Summary by J. Scarlet
From the books, Snakes in Suits by Dr. Paul Babiak & Dr. Robert Hare, Corporate Psychopaths: Organizational Destroyers by Dr. Clive Boddy and Working with Monsters by Dr. John Clarke
Psychopaths employ a particular pattern of tactics to enter corporations and rise up corporate ladders, (Babiak & Hare, 103). They bear certain characteristics that make them appear to be ideal candidates for jobs. Lying and manipulating come naturally for them, so they can create compelling resumes that make them look good to potential employers, (104). Since they are charming and don’t get nervous like normal people do, they come off as confident, assertive, intelligent, and smooth during interviews.
The Assessment Phase
Once hired, corporate psychopaths begin assessing their new environments. They pay close attention to relationships among workers and to the cultures of the organizations, (Babiak & Hare, 122). They study their responsibilities and the company policies so they know where the loop-holes are and what explanations they can create if any questions or complaints should arise, (Clarke, 173).
Psychopaths use their charm to make good impressions on others and to gain their trust, (Babiak & Hare, 48-49). They also observe everyone’s personalities so they can custom tailor personas that fit with what they think people will like to hear. They act very accepting of others and can become so popular that they gain the trust and loyalty of many, (74 & 125). Over time, a rapport is established with the employees and a false perception of who they are is solidified, (Clarke, 134-135).
While they are befriending everyone, corporate psychopaths are also assessing each person’s value so they can see of what use they might be to them, (Babiak, & Hare, 74). Some people will be used for information, money or connections, while others will be used to protect and defend the psychopath’s behavior, (125 & 127).
The Manipulation Phase
Once corporate psychopaths have developed good reputations within their companies, they begin manipulating others for the purposes of entertainment, advancing in the companies and gaining power, (Babiak & Hare, 128). They cause conflict and confusion for fun and to distract attention away from their inappropriate behaviors, (Boddy, 59). They engage in intimidating behavior and also encourage bullying in the workplace.
Corporate psychopaths are very clever at manipulating communication between employees, (Babiak & Hare, 128). They spread disinformation to make themselves look good, to make their rivals look bad, and to keep others from uncovering the truth. They are even able to con some coworkers into carrying their workloads for them, (132).
People who the psychopaths are not attempting to manipulate might be able to see how the psychopaths are using others, (Babiak, & Hare, 126). These people may try to warn the others about how manipulative the psychopath is being. If this occurs and the psychopaths hear about this, they are so smooth that they will easily blame these concerns on things like a misunderstanding or an envy of their popularity.
Corporate psychopaths prefer operating in private, using bonds with individuals to gain information and support that they can use to advance their careers and to destroy the careers of their rivals, (Babiak & Hare, 130). They manipulate groups from behind the scenes and appear to be friends with everyone when really they are controlling the entire situation, (Clarke, 110).
The Ascension Phase
Once all the key players in the corporate psychopath’s games have successfully been manipulated, the psychopaths direct their attention to being promoted, (Babiak & Hare, 140). It is common for them to select targets among senior management to befriend, (Clarke, 107). Charming the manager’s personal assistants and developing relationships with them can also help open the door for future promotions, (108).
As corporate psychopaths are promoted within their companies, they enjoy having more power and control over the people around them, (Clarke, 112). Usually when they reach the higher level ranks in organizations, they begin implementing strategies that cause unnecessary stress for their employees, because they enjoy watching people suffer.
How Corporate Criminal Psychopaths Con Their Victims
From Working with Monsters by John Clarke
Summary by J. Scarlet
Corporate psychopaths con their victims in stages, (Clarke, 134). The first stage involves meeting the victim and bombarding them with so much information that the victim has no time to evaluate it. The psychopath compliments the victim, who is often selected because of their loneliness or low self-esteem. During this phase, the psychopath appears very friendly and helpful. They will establish a rapport with the victim to ensure the victim’s false perception of them is solidified in the second stage, (134-135).
The third stage involves identifying the victim’s needs and emotional weak points, such as not feeling loved or being financially insecure, (Clarke, 135). The psychopath then creates lies to make the victim believe their needs will be met if they trust the psychopath.
In the fourth stage, the psychopath creates emotional pain if the victim begins to doubt the psychopath’s credibility, (Clarke, 135). At this point the psychopath may attack the victim for being ‘stupid’ not to trust them. Since the victim has already imagined that their needs will be met, it is difficult for them to believe they have been conned so they continue supporting the psychopath, (136).
In the fifth stage, the psychopath employs reverse psychology on the victim, (Clarke, 136). They criticize the victim for their lack of trust in the psychopath and suggest that the victim must lack courage or determination. The victim loses confidence in their ability to make decisions because they’ve trusted the psychopath to take care of them and it’s proven to be a huge mistake, (137).
Consumer scams are effective ways for psychopaths to deceive larger numbers of victims, (Clark, 137). The most common consumer scams involve property, superannuation, and investment seminars. The needs of the victims are generally centered on financial success.
For example, the psychopath creates emotional pain by explaining to their audience that they are not millionaires, they don’t know how to invest, they are financially struggling, etc, (Clarke, 137-138). Using reverse psychology, they suggest to their audience that it takes courage, determination and trust to invest in their ‘scheme’, (138). At this point, the corporate criminal psychopath either sells them ‘investment packages’ that are over-inflated or they take their victims’ money and disappear. It also is relatively easy for the corporate criminal psychopath to use their glib and superficial charm to steal a person’s identity in the process.
From the books, Working with Monsters by Dr. John Clarke and Corporate Psychopaths: Organizational Destroyers by Dr. Clive Boddy
Summary by J. Scarlet
Most psychopaths are successful at avoiding detection, because they do not engage in violent criminal behavior. According to Dr. Hare, these types of psychopaths are able to control their anti-social impulses and are so clever and charming that they are able to avoid getting in trouble with the law, (Boddy, 39). Dr. Boddy characterizes these psychopaths as glib, superficially charming, having a grandiose sense of self-worth, accomplished liars, conning and manipulative, lacking remorse, emotionally shallow, cold and calculating, lacking empathy, and refusing to accept responsibility for their actions, (14).
Dr. Babiak, Dr. Hare, and Dr. Boddy have labeled this subtype as ’corporate’ psychopaths. Labeling them as ‘corporate’ can be misleading, however, because they do not all work at corporations. They can also be found in religious organizations, law enforcement, the military, politics, and even in medicine and education.
Dr. John Clarke is more specific and places these ‘successful’ psychopaths into three categories: ‘occupational’, ‘corporate criminal’, and ‘organizational’, though some psychopaths fall into more than one category. “Everything they do is in their own self-interest. How they satisfy their needs is what sets them apart,” (Clarke, 183). For the purpose of this paper I will explain Dr. Clarke’s subtypes.
The Occupational Psychopath
The occupational psychopath uses their occupation to satisfy their desires while avoiding or minimizing punishment, (Clarke, 76). They don’t necessarily want to climb the company’s ranks, because they enjoy the power and control that they already have. Psychopaths who are police officers, army officers, parking officers, security guards, or those who work for government agencies fall into this category, (76-77, 168 & 172).
Occupational psychopaths can exhibit violent and non-violent criminal behaviors and manipulate others in the workplace to escape detection, (Clarke, 180). They employ multiple tactics to gain complete control over their victims, (179). They play on their victims’ fears and emphasize their victims’ fates for disobeying them. Obedience is gained by getting the victims to think they are the only person that can be trusted, (180).
The Corporate Criminal Psychopath
The corporate criminal psychopath commits crimes in their workplace, or as a part of an organized ring devoted to corporate crimes, (Clarke, 65). “This category includes bank employees who defraud their employers, stock brokers involved in scams, builders who ‘con’ clients, real estate agents who dupe home owners, lawyers who spend their clients’ trust funds, second-hand car salespeople who alter cars to get a sale, gangs who are involved in identity theft and the use of fraudulent checks and so on,” (65-66). They rely on peoples’ greed and their low self-esteems to help them commit their crimes, (133).
When these psychopaths enter companies they make connections with people they can use to help them cover up their behavior, (Clarke, 125). They are usually superficial and brilliant at giving the ‘right’ impressions to con their victims, (67). They find weak spots in the systems that allow them to steal large amounts of money and avoid detection for long periods of time (125). They blend so well into organizations and societies that it is difficult to detect them until it is too late, (143).
The Organizational Psychopath
The organizational psychopath craves a god-like feeling of power and control over other people, (Clarke, 95). They prefer to work at the very highest levels of their organizations, because this allows them to inflict harm the most amounts of people, (60). Psychopaths who are political leaders, managers and CEOs fall into this category.
Organizational psychopaths generally appear to be intelligent, sincere, powerful, charming, witty, and entertaining communicators, (Clarke, 84 & 99). They quickly assess what people want to hear and then create stories that fit those expectations, (98). They will con people into doing their work for them, take credit for other people’s work and even assign their work to junior staff members, (92-93). They have low patience when dealing with others, display shallow emotions, are unpredictable, undependable and fail to take responsibility if something goes wrong that is their fault, (90-95).
…And They Will Do It Again and Again Unless They Are Removed From Power”
A senior UK investment banker and I [were] discussing the most successful banking types we know and what makes them tick. I argue that they often conform to the characteristics displayed by social psychopaths. To my surprise, my friend agrees.
He then makes an astonishing confession: “At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles.”
“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.
An excerpt from The Psychopath Test by John Ronson
“He said, almost to himself, ‘I should never have done all my research in prisons. I should have spent my time inside the Stock Exchange as well.’
I looked at Bob [Hare]. ‘Really?’ I said.
‘But surely stock-market psychopaths can’t be as bad as serial killer psychopaths,’ I said.
‘Serial killers ruin families.’ Bob shrugged. ‘Corporate and political and religious psychopaths ruin economies. They ruin societies.’
This–Bob was saying–was the straightforward solution to the greatest mystery of all: Why is the world so unfair? Why all that savage economic injustice, those brutal wars, the everyday corporate cruelty? The answer: psychopaths. That part of the brain that doesn’t function right. you’re standing on an escalator and you watch the people going past on the opposite escalator. If you could climb inside their brains, you would see we aren’t all the same. We aren’t all good people just trying to do good. Some of us are psychopaths. And psychopaths are to blame for this brutal, misshapen society. They’re the jagged rocks thrown into the still pond.”