Failed and Flawed Leadership and Ethics Violations: The White Collar Psychopath

1. Failed and Flawed Leadership and Ethics Violations: The White Collar Psychopath

2. A rose by any other name… Whether called “white-collar psychopath, successful psychopath”, or “corporate psychopath,” these all describe a person who narcissistically conducts business with deceit, manipulation, charm, and predatory behavior while being unremorseful and unempathicof the impact on others or ethical standards.

3. Organizations value and reward people who have charisma and can inspire others, have a “can-do” attitude (regardless of methods), and are able to think strategically and even manipulatively http://www.leadershipnow.com/leadingblog/leadership_development/

4. Characteristics of personality disorders include: • Self-centeredness that manifests itself through a me-first, self-preoccupied attitude. • Lack of individual accountability that results in a person blaming others and society for their problems. • Lack of perspective-taking and empathy. • Manipulative and exploitative behavior. • Unhappiness, suffering from depression and other mood and anxiety disorders. • Vulnerability to other mental disorders, such as obsessive-compulsive tendencies and panic attacks. • Distorted or superficial understanding of self and others' perceptions, being unable to see his or her objectionable, unacceptable, disagreeable, or self-destructive behaviors or the issues that may have contributed to the personality disorder. • Socially maladaptive, changing the rules of the game, introducing new variables, or otherwise influencing the external world to conform to their own needs. http://www.mentalmenace.com/personalitydisorders.php

5. “Successful” or White Collar Psychopathy? • Andrew Fastow, formerly of Enron, stands accused by an American court of taking $30 million in kickbacks from the company while its shareholders lost more than $70 billion • Bernie Ebbers of WorldCom arranged for his telecom company to lend him $408 million as it went toward bankruptcy • John Rigas, founder of Adelphia cable TV, built a $13 million golf course for himself while shareholders lost $60 billion in investments

6. Psychopathic features and their positive corporate labels What is considered as indications of pathology in some settings… …is recognized and rewarded as skilled, competitive, and “action-oriented” in other settings Wexler, M. N. (2008). Conjectures on systemic psychopathy: reframing the contemporary corporation. Conjectures on systemic psychopathy: Reframing the contemporary corporation. Society and Business Review, 3(3), 224-238.

7. Corporate officers with psychopathic features? John Rigas Adelphia Bernie Madoff Financier Kenneth Lay & Jeff Skilling Enron Bernie Ebbers WorldCom Dennis Kozlowski Tyco Sam Waksal Imclone Jack Abramoff Lobbyist Leona Helmsley Hotelier “Chainsaw” Al Dunlap Sunbeam Jordan Belfort “The Wolf of Wallstreet” Tom Petters MN Ponzi scheme Deutchman, A. (July, 2005). Is your boss a psychopath? Fast Company, 96, 44ff.

8. In a study of 200 executives from eight international companies, 3.5% were found to have psychopathic personalities (that’s

9. Hare characteristics The psychopathic personality (PCL-R) • Glibness/superficial charm (1) • Grandiose sense of self-worth (1) • Pathological lying (1) • Cunning/manipulative (1) • Lack of remorse or guilt (1) • Shallow affect (1) • Callous/lack of empathy (1) • Failure to accept responsibility for own actions (1) • Need for stimulation/proneness to boredom (2) • Parasitic lifestyle (2) • Poor behavioral controls (2) • Early behavior problems (2) • Lack of realistic, long-term plans (2) • Impulsivity (2) • Irresponsibility (2) • Juvenile delinquency (2) • Revocation of conditional release (2) • Promiscuous sexual behavior (T) • Many short-term relationships (T) • Criminal versatility (Hare, 1986) (T) Factor 1: Callous emotional and interpersonal detachment; affective impairment Most corporate psychopaths score more on Factor 1 than 2 ? Factor 2: Chronic and socially deviant antisocial behaviors & lifestyle http://www.softpanorama.org/Social/Toxic_managers/psychopath_in_the_corner_office.shtml

10. Unlike the criminal or antisocial psychopath, the white-collar psychopath usually does not engage in violence or direct criminal behavior. Instead, they operate through glibness, manipulation, deceit, and with a lack of remorse or guilt http://en.wikipedia.org/wiki/Psychopathy

11. Labour’s estimated impact of psychopathy on the organization • 25% of all resignations are due to the effect of a corporate psychopath • 50% of all stress leaves are related to or caused directly or indirectly by a corporate psychopath • 25% staff turnover rate is the norm for psychopathic managers • Each victim of a psychopath is out of pocket $10,000 • The community is out of pocket to the tune of $5000 per victim Gilbert Labour is an executive coach and bases his estimates on 30 years experience http://www.psychopath-research.com/forum/ubbthreads.php/topics/1074/2/Corporate_Psychopaths

12. Ascension And finally, there is the betrayal of the patron and the promotion into the patron’s job. Stages of progression of the corporate psychopath through the organization Abandonment & Confrontation At this stage, the pawns are abandoned when they are no longer considered of use. The psychopath stops talking to people who previously thought they were friends with the psychopath. Manipulation The manipulation stage is where they start to create conflict among their co-workers – the pawns – often through a campaign of disinformation. When in conflict, people don’t talk to each other – a perfect environment for the psychopath. At the same time, the psychopath will continue to groom the patron, often their direct boss, as a means of protection and defense. Assessment The assessment stage is the honeymoon period where the psychopath will establish an influence network normally based on one to one interaction with individuals – what is described as the ‘Psychopathic Bond’. The Psychopathic Bond is based on lies and manipulation and the ability of the psychopaths to analyse the victim’s expectations and desires. At this stage, the psychopath will identify ‘pawns’, ‘patrons’ (bosses and those with power) and the ‘police’ (HR and accounting departments). One thing to note – psychopaths don’t like group meetings where it is more difficult to manipulate people. Organizational Entry Psychopaths tend to be very adept at the entry and interview stage. They are confident, charming, have no qualms lying and say whatever it takes to get the job. Babiak, P. (November 12, 2008). Psychopaths in the boardroom. 2008 Meyler Campbell Annual Lecture, Royal Society of Medicine.

13. Personal StyleInsincere Arrogant Untrustworthy Manipulative Interpersonal RelationsInsensitive Remorseless Shallow Blaming Organisational MaturityImpatient Erratic Unreliable Unfocused Parasitic Antisocial TendenciesDramatic Unethical Bullying how an individual sees oneself and attitude toward others The B-Scan Inventory understanding of feelings and emotions of self and others, and how they are used in the business setting what is required to be a contributing member of an organization effectiveness of one’s interaction with others

14. Reducing Psychopathy and the Cultures That Enable Them • Conduct extensive background, assessment and interviews for people in leadership positions or aspiring to such. • Conduct regular performance reviews that examine prosocial and antisocial behavior • Document abuses over time to show a pattern of behavior • Model prosocial and ethical behavior from the top down the organization • Annually review the organizational culture and the behavior that indicates transparent and hidden indicators of what is valued • GroupThink is likely with highly cohesive leadership teams; use countermeasures to reduce the risk (e.g., devil’s advocates at meetings, invite external experts to observe and feedback, etc.) • Build a strong, diverse, and well-informed Board of Directors/Trustees to balance administrative leaders

15. More recommendations… • Have more group involvement at the interview stage; psychopaths tend to prefer individual interviews that they can control • Obtain documentation for claims and have follow-up phone confirmation • Listen to what people say and diligently follow up on accusations • Corroborate information from multiple sources

16. Machiavellianism: Assessing manipulative and deceptive styles • Niccolo Machiavelli, 16th century Italian statesman, first described the need for leaders to be deceptive and manipulative in order to control the state • Richard Christie and Florence L. Geis in the 1960s formulated a questionnaire (the Mach IV) based on Machiavelli’s book, The Prince. This is a widely used test for this trait. • Although there are important differences between tendency to manipulate and psychopathy, beliefs about deception are a central factor in psychopathy • However, many prominent strategic leaders continue to conduct themselves according to Machiavelli • You can take the Mach IV to see how you would score on the test. Caution—do not draw general conclusions about yourself based on single sources of information such as self-tests. However, it can help you explore this aspect of your leadership style Niccolo Machiavelli

17. Additional readings of interest • Machiavellianism and ethical computer use— • Managing intellectual property & IT security: The fear-driven workplace • Leader emergence and ethical attitudes • Is your boss a psychopath? • The IS Machiavelli END

18. Psychopaths have lower activity of the amygdala (emotional arousal) during emotional moral decision making. This reduced activity was also found to be related to each of the four areas of psychopathy. For these individuals, other brain areas showed reduced efficiency during moral reasoning. http://neurologicalcorrelates.com/wordpress/2009/03/02/white-collar-psychopath-fraudfeasors-who-use-other-people-as-tools-for-conning-duping-manipulating-and-perpetrating-fraud-brain-scan-study-does-a-broken-moral-neural-circuit-excuse-evil/

20. http://www.psychiatrictimes.com/display/article/10168/48556