Op-Ed: Former City PR Man On "Corporate Psychopaths"

[Zaune]

The Independent, via Charlie Stross.

Outlook Over the years I've met my fair share of monsters – rogue individuals, for the most part. But as regulation in the UK and the US has loosened its restraints, the monsters have proliferated.

In a paper recently published in the Journal of Business Ethics entitled "The Corporate Psychopaths: Theory of the Global Financial Crisis", Clive R Boddy identifies these people as psychopaths.

"They are," he says, "simply the 1 per cent of people who have no conscience or empathy." And he argues: "Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the [banking] crisis'.

And Mr Boddy is not alone. In Jon Ronson's widely acclaimed book The Psychopath Test, Professor Robert Hare told the author: "I should have spent some time inside the Stock Exchange as well. Serial killer psychopaths ruin families. Corporate and political and religious psychopaths ruin economies. They ruin societies."

Cut to a pleasantly warm evening in Bahrain. My companion, a senior UK investment banker and I, are 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."

Here was one of the biggest investment banks in the world seeking psychopaths as recruits.

Mr Ronson spoke to scores of psychologists about their understanding of the damage that psychopaths could do to society. None of those psychologists could have imagined, I'm sure, the existence of a bank that used the science of spotting them as a recruiting mechanism.

I've never met Dick Fuld, the former CEO of Lehman Brothers and the architect of its downfall, but I've seen him on video and it's terrifying. He snarled to Lehman staff that he wanted to "rip out their [his competitors] hearts and eat them before they died". So how did someone like Mr Fuld get to the top of Lehman? You don't need to see the video to conclude he was weird; you could take a little more time and read a 2,200-page report by Anton Valukas, the Chicago-based lawyer hired by a US court to investigate Lehman's failure. Mr Valukas revealed systemic chicanery within the bank; he described management failures and a destructive, internal culture of reckless risk-taking worthy of any psychopath.

So why wasn't Mr Fuld spotted and stopped? I've concluded it's the good old question of nature and nurture but with a new interpretation. As I see it, in its search for never-ending growth, the financial services sector has actively sought out monsters with natures like Mr Fuld and nurtured them with bonuses and praise.

We all understand that sometimes businesses have to be cut back to ensure their survival, and where those cuts should fall is as relevant to a company as it is, today, to the UK economy; should it bear down upon the rich or the poor?

Making those cuts doesn't make psychopaths of the cutters, but the financial sector's lack of remorse for the pain it encourages people to inflict is purely psychopathic. Surely the action of cutting should be a matter for sorrow and regret? People's lives are damaged, even destroyed. However, that's not how the financial sector sees it.

Take Sir Fred Goodwin of RBS, for example. Before he racked up a corporate loss of £24.1bn, the highest in UK history, he was idolised by the City. In recognition of his work in ruthlessly cutting costs at Clydesdale Bank he got the nickname "Fred the Shred", and he played that for all it was worth. He was later described as "a corporate Attila", a title of which any psychopath would be proud.

Mr Ronson reports: "Justice departments and parole boards all over the world have accepted Hare's contention that psychopaths are quite simply incurable and everyone should concentrate their energies instead on learning how to root them out."

But, far from being rooted out, they are still in place and often in positions of even greater power.

As Mr Boddy warns: "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. Further, if the corporate psychopaths theory of the global financial crisis is correct, then we are now far from the end of the crisis. Indeed, it is only the end of the beginning."

I became familiar with psychopaths early in life. They were the hard men who terrorised south-east London when I was growing up. People like "Mad" Frankie Fraser and the Richardson brothers. They were what we used to call "red haze" men, and they were frightening because they attacked with neither fear, mercy nor remorse.

Regarding Messrs Hare, Ronson, Boddy and others, I've realised that some psychopaths "forge careers in corporations. The group is called Corporate Psychopaths". They are polished and plausible, but that doesn't make them any less dangerous.

In attempting to understand the complexities of what went wrong in the years leading to 2008, I've developed a rule: "In an unregulated world, the least-principled people rise to the top." And there are none who are less principled than corporate psychopaths.

Brian Basham is a veteran City PR man, entrepreneur and journalist

I don't want to live on this planet anymore.

[Rabid]

Damn.

I've been suspecting for a while now that a good chunk of the Corporate Elite could be considered as being clinically psychopath, but never did I think in my wildest paranoid nightmares that the system could be so lacking in any kind of morality as to specifically and systemically recruit psychopaths in order to put them in high-responsibility posts.
I always thought that they rose to power by their own machinations, not that they were selected and nurtured by the system.

It is a chilling prospect...


This article put into a new perspective a documentary I've seen years ago, The Corporation (2003), where it is the corporations themselves, as "moral persons", that are said to be psychopathic in natures.

[Knife]

They keep saying psychopaths when I think they really mean sociopaths.

[Kryten]

They keep saying psychopaths when I think they really mean sociopaths.

Those words mean the same thing.

[Knife]

They keep saying psychopaths when I think they really mean sociopaths.

Those words mean the same thing.

Not really. A psychopath denoted someone with a break from reality, how and what it is depends entirely on the patient. A sociopath denotes someone who has broken with society, usually meaning a lack of empathy for fellow human beings. A psychopath is generally not rational, either internally or externally, with their delusions. A sociopath can be very rational, but doesn't see people or their rules as something that effects him/her.

[Kryten]

You're thinking of Psychosis, not Psychopathy.

[Enigma]

I'm not surprised. Cracked had an article that basically said that CEOs basically had to be nuts when running a corporation. This only confirms it.

[Rabid]

They keep saying psychopaths when I think they really mean sociopaths.

Those words mean the same thing.

Not really. A psychopath denoted someone with a break from reality, how and what it is depends entirely on the patient. A sociopath denotes someone who has broken with society, usually meaning a lack of empathy for fellow human beings. A psychopath is generally not rational, either internally or externally, with their delusions. A sociopath can be very rational, but doesn't see people or their rules as something that effects him/her.

* * *

You're thinking of Psychosis, not Psychopathy.

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Let's try to define the heart of the matter a bit before this thread turn into a semantical nitpicking shitfest, shall we ?...

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http://en.wikipedia.org/wiki/Sociopathy ==> Antisocial personality disorder

http://en.wikipedia.org/wiki/Psychopath ... biguation)

http://en.wikipedia.org/wiki/Psychopathy ==> see below :

Psychopathy is a personality disorder characterized primarily by a lack of empathy and remorse, shallow emotions, egocentricity, and deception. Psychopaths are highly prone to antisocial behavior and abusive treatment of others, and are disproportionately responsible for violent crime when in a violent emotional state or situation. Though lacking empathy and emotional depth, they often manage to pass themselves off as average individuals by feigning emotions and lying about their past.

[Paraphrase] The definition of psychopathy has changed several times in the history of psychiatry with the successive revisions of the DSM (Diagnostic and Statistical Manual of Mental Disorders) [/paraphrase]

Despite being currently unused in diagnostic manuals, psychopathy and related terms such as psychopath are still widely used by mental health professionals and laymen alike

Despite the similarity of the names, psychopaths are rarely psychotic.[9]. Not all psychopaths are violent; they often use manipulation to gain what they want. In general, they are people who care little about what others think about them and they use others to achieve their goals or needs. They can be successful or unsuccessful. When unsuccessful, these people often resort to criminal activities to satisfy their need for a purpose in life. [13]

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You're welcome.

[Zixinus]

This is the end result of capitalism: when you have a rule that prevents a corporation from profiting due to that action causing human sorrow, the more successful corporation will be the one that is lead by a psychopath.

However, I too find it utterly chilling that they seek out psychopaths specifically for high, big-responsibility positions because of their condition.

[Channel72]

Why is this supposed to be surprising? The only reason this sounds shocking is because the author of this piece has decided to use the word "psychopath" (a word normally reserved for Norman Bates and Charles Manson) to describe ruthless, cut-throat business people. Normally, we wouldn't use the word "psychopath" to describe these types of people, but we already know that the sort of behavior that lends itself to success as a CEO often includes ruthless efficiency and disregard for the welfare of other people.

I've never met Dick Fuld, the former CEO of Lehman Brothers and the architect of its downfall, but I've seen him on video and it's terrifying. He snarled to Lehman staff that he wanted to "rip out their [his competitors] hearts and eat them before they died".

That sounds more like standard competitive trash talk than an indicator of an actual psychopath.

[Dominus Atheos]

*Snip*

You're welcome.

The problem with that definition is that it is possible for someone to have a complete lack of respect for societal norms and/or the inability to experience empathy without necessarily being violent or especially greedy. What do you call those people?

[Fingolfin_Noldor]

Is this any weirder than computerizing things, enforcing written rules, or the extreme end: the AI love that technophiles have?

You want somebody to play the game according to the rules, without letting emotional baggage get in the way. Where computers or rules alone can do it, they do do it. Where they can't, the next best thing is a human without that baggage.

And who gets to write those rules?

[The Grim Squeaker]

Toootally different from how many technology and programming companies look for autistic candidates or with Asperger's syndrome. Totallllly different.

[Alkaloid]

The problem with that definition is that it is possible for someone to have a complete lack of respect for societal norms and/or the inability to experience empathy without necessarily being violent or especially greedy. What do you call those people?

Not really, they may not have respect for societal norms or any particular inclination to go along with them, but they are also aware that society doesn't tolerate people just ignoring the way society works, so they only act on it if and when they think they can get away with it. Well, the smart ones do, the stupid ones end up in prison.

[Xenophobe3691]

Toootally different from how many technology and programming companies look for autistic candidates or with Asperger's syndrome. Totallllly different.

The problem is, that bankers have something called "fiduciary duty", where they are supposed to have another party's best interests at heart

[Shroom Man 777]

Then again, the shareholders and CEOs can determine that to maximize profits, they can go bribe the legislature so the legislature won't reshape the environment somewhat, so the more profitable shit that leads to terrible things ends up being continued!

[Fingolfin_Noldor]

And who gets to write those rules?

The shareholders, the legislature, and science.

Runners of public companies have the fiduciary duty, like Xenophobe3691 said, but this duty isn't about being a nice guy: it's about always doing what's best for the shareholders.

They legally aren't allowed to put their own feelings or desires ahead of that of the shareholders.


So, next up, what do the shareholders want? Bigger returns on their investment.


Thus, the CEO is required by law to not focus on himself or anybody else except those shareholders, who just want moar money.

His first and only duty is to maximize company profits.



This is where science comes in. From observation of the rational world and the use of logic, the CEO can determine what does and does not work to maximize profits.

Things like the laws of competition arise from this, similarly to how biologists can describe the natural selection process.

Now, the companies play by these rules and try to manipulate these rules back to their sole goal: maximizing profits for the shareholders.


The people sometimes say "hey this shit leads to terrible things", and that's where the legislature comes back in to reshape the environment somewhat, so the observations lead to different rules for them to play by.


But, bottom line: the CEOs don't write the rules.

You give the same people who support this sort of wanton behaviour the right to write the rules. BRILLIANT!

[Shroom Man 777]

Then again, the shareholders and CEOs can determine that to maximize profits, they can go bribe the legislature so the legislature won't reshape the environment somewhat, so the more profitable shit that leads to terrible things ends up being continued!

To add to this, if we allegorize the "shareholder-CEO-corporate" mechanism as a machine or a computer, then what's happening now with these sociopaths reshaping the environment to maximize it - to the point of neutering the systems designed to keep them in check (bribing and corrupting the government) - is basically like the machine or computer coming to life and taking over its creators and going amok.

[Shroom Man 777]

Look around you, mang. The way the system work has led to totally shitty things. That system and how it works has to be changed.

[Simon_Jester]

I don't think there's anyone here who'd propose psychometric tests for CEOs before they'd propose campaign finance reform, though.

[Eulogy]

If monsters aren't forcibly removed from positions of power, society will do it for them. If bankers, et al aren't held responsible for their actions, then they will get lynched by angry mobs. It has happened before and it will happen again if this continues.

[Simon_Jester]

I don't think there's anyone here who'd propose psychometric tests for CEOs before they'd propose campaign finance reform, though.

I really don't think those tests would help at all. The "nice guy" CEO is just a (possibly) inefficient version of the psycho one - both are still going after the same thing: maximizing shareholder returns, and if they don't do that, both will be replaced by someone who will. Either fired by the board, or outcompeted in the marketplace, the result is the same.

Campaign finance reform is something we can definitely agree on, though.

You missed my point- who here even cares, really, about psychometric tests for CEOs? Dwelling on how a solution wouldn't solve anything is irrelevant of no one considers it a high priority to implement the solution.

[Starglider]

This is a heartwarming tale of positive discrimination allowing the mentally ill to not just function in society, but to reach the highest echelons of respect and success. It is a glowing example of political correctness and the power of positive thinking overcoming otherwise crippling brain dysfunction. No left thinking socio-liberal-equalitari-communoid would have the heart to object to this demonised, victimised minority finding a cherished socio-economic role. You must all be the worst kind of republo-racist-capitaloid-thatcherists to want to take away their hard-won gains.

[Shroom Man 777]

But Starglider it would defeat the purpose of capitalism if the heads of corporations were appointed Stalinist stooges.

[K. A. Pital]

I've been saying it for quite a while on this board that capitalism's darwinian mechanism favors psychopathy a lot, and to rise up you need to be a psycho. I remember people asking me whether there's any confirmation.

This looks like a confirmation, sort of. Too bad.