Bernie Madoff outside court in January 2009. Madoff scammed his clients out of US$18 billion. Photo / AP
Bernie Madoff outside court in January 2009. Madoff scammed his clients out of US$18 billion. Photo / AP
Do you ever feel like your boss is always taking credit for your work while belittling you and focusing on themselves? If so, your manager might be a corporate psychopath.
Clive Boddy, professor of management at Anglia Ruskin University, will on Monday present his research on “ruthlessly self-serving” psychopathic bosses and what they mean for the economy at the Chelmsford Science Festival.
Boddy has pioneered the study of the corporate psychopath in academia, arguing that the unique combination of character traits they possess contributed to the 2008 financial crisis, among other disasters.
Psychopathy is not officially recognised as a medical or mental health condition but is seen as a personality disorder. Psychopaths are wired to feel no shame or empathy and estimates suggest they make up around 1 per cent of the adult population.
They are drawn to positions of power, particularly in finance.
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“What they are really after is money, power and control, and those are things that are to be found more in the financial sector than, for example, the caring professions,” says Professor Boddy.
Previous research has found that 3.9 per cent of people in senior management positions are psychopathic. In financial services, Boddy reckons it could be closer to 8 per cent.
“There was one New York psychiatrist who said that about 10 per cent of his Wall Street patients were psychopathic.”
These people are what are sometimes known as “successful psychopaths”. They function within society – and in fact do so very well.
“Essentially, they realise that robbing a post office will send you to jail, but taking money through more legal means within a corporate structure is much safer and more rewarding,” Boddy says.
These individuals often get very rich. However, they also have a track record for driving companies into bankruptcy.
Notable figures exemplifying corporate psychopathic traits through history include Bernie Madoff, architect of the world’s largest ever ponzi scheme, who scammed people out of US$18 billion; media magnate Robert Maxwell, who stole £400 million from his employees’ pension funds; US executive Albert Dunlap, who was known as “Chainsaw Al” because of his brutal mass layoffs and whose career ended in a massive accounting scandal; and Ken Lay, the founder of Enron, the commodities company that imploded in one of the biggest accounting scandals of all time.
How do they get away with it? Corporate psychopaths can be dazzling. They are glamorous, grandiose, and obsessed with the minutiae of their self-image – think Patrick Bateman jealously admiring a rival’s business card in American Psycho.
Red flags
The biggest sign of a corporate psychopath is a marked difference in how they behave to junior and senior colleagues.
“They tend to be seen as stars by those above them because they are so good at impression management, whereas their subordinates tend to think they’re the devil in a suit,” Boddy says.
Psychopaths are often sarcastic and enjoy belittling people in public. “They make people cry in the office in front of other people.”
Psychopaths enjoy belittling junior colleagues in public.
As a result, corporate psychopaths tend to hollow out companies. Boddy says: “As soon as they arrive, good people start to leave. That leaves a dearth of experience in the organisation and a lack of ability to train newcomers.
“Not only do people leave under the leadership of a corporate psychopath, it undermines their self-confidence and willingness to work.”
However, spotting and weeding out corporate psychopaths can be difficult. They are very good at interviews.
“Selection panels are bamboozled by their display of charm,” Boddy explains.
Psychopaths are particularly good at lying and claiming the work of other people as their own. Reference checks are typically made to people’s former bosses, who are often satisfied with the work. However, those who have worked below a corporate psychopath may have a very different view.
Corporate psychopaths champion more selfish, short-term systems of rewards. They push for immediate personal bonuses rather than making decisions for long-term growth.
Boddy has argued that it was this outlook that contributed to the 2008 financial crisis.
“It explains the culture of greed and lack of ethics and selling of derivative products when no one really understood the risks associated with them.”
While corporate psychopaths are a minority in the workforce, almost everyone feels the effects of their management style given their impact on companies as a whole.
The problem goes beyond the finance sector. Politics is also a fertile ground for corporate psychopaths, says Boddy, as is law and, alas, the media.
What can be done?
Boddy argues that employers should improve reference checks and increase the use of psychometric testing, which can measure people’s personality traits. This is particularly important for senior appointments, he says.
A more radical suggestion is that regulators could give companies psychopathy ratings, he suggests.
Some may argue that solving the problem of corporate psychopathy is simply not worth the effort. But Boddy believes it is a scourge that must be addressed.
“Some people I have spoken to [who worked under corporate psychopaths] have taken a few years to get back to their normal levels of self-belief and self-confidence. That represents a net reduction in what would otherwise have been the productivity of the economy. That will ultimately have an effect in terms of gross national product.”
Put simply, it is a matter of national importance – not just a case of rooting out a few rotten apples.
