Would you want a psychopath looking after your pension? Or what about your shares? In a recent talk at the Cambridge Festival of Science, I spoke about the latest research relating to a psychopath’s love of money, greed for power, and willingness to harm other people financially for personal gain.
Since I began researching corporate psychopaths and the global financial crisis, the idea of the financial psychopath, an employee in the financial sector acting ruthlessly, recklessly, greedily and selfishly with other people’s money, has gained traction.
The theory won support because psychopaths are more commonly found in financial services than in other sectors. It has even been argued that up to 10% of employees in financial services could be psychopathic. That is to say they have no empathy, care for other people, conscience or regrets for any damage they do.
These traits make them ruthless in pursuit of their own agendas and entirely focused on self-promotion and self-advancement.
But my ongoing research goes even further. It has found that psychopaths are willing to knowingly cause financial harm to the entire global community, in order to receive a financial bonus for themselves. Personal greed outweighs the immense social and community costs of implementing that greed.
This aligns with earlier perceptions of some captains of finance or leading politicians as psychopaths. Previous research found they are freed by their selfish philosophy of life and their trivialising of other people from the restraints of being evenhanded, truthful or generous.
This new research also shows that a majority of psychopaths would even be willing to cause a global financial crisis – if they personally would profit from, for example, falling stock prices. This willingness holds true even when they could be personally identified as being the source of the crisis. Only a tiny minority of non-psychopaths would be willing to do this.
Race to the top
Financial insiders appear to agree with the assumption that psychopaths have always been prevalent in the sector. Many psychologists and other management commentators have come to the same conclusion.
Researchers have also found that interpersonal-affective psychopathic traits – such as deceitfulness, superficial charm and a lack of remorse – were associated with success in the finance sector.
Employees at financial institutions in New York scored significantly higher on these traits than people in the wider community. They also had significantly lower levels of emotional intelligence (as would be expected of psychopaths).
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What’s more, having psychopathic traits has also been linked to higher annual incomes – as well as a higher rank within the corporation.
In other words, it looks like the more psychopathic an employee is, the further up the corporate finance ladder they will go. This corresponds with findings that show there are more psychopaths at the top of organisations than at the bottom.
Creating destruction
This is not to say that personal success in climbing the corporate ladder equates to professional success when someone reaches the top job. Quite the opposite. In fact, my research has shown that psychopathic leadership is associated with organisational destruction.
This includes a greater propensity to take risks with other people’s money, a greater willingness to gamble with someone else’s money and lower returns for shareholders.
In one study over a ten-year period, psychopathic fund managers were found to generate annual returns that were 30% lower than their less psychopathic peers.
The research team concluded that among elite financial investors, psychopathy and its appearance of personal dominance and competence, may enable people to rise to the top of their profession. But this does not translate into improved financial performance at the organisational level, where the presence of the psychopathic is actually counterproductive.
Fraud has always been associated with the psychopathic – so much so that in one study 69% of auditors believed they had encountered corporate psychopaths in relation to their investigations.
Years ago, one bank reportedly used a psychopathy measure to recruit staff. But I would advise against hiring people who score very highly, because they are totally concerned with personal success. They are not bothered about long-term organisational growth or sustainability. As such, decisions will be made to suit the psychopathic worker, and not the organisation.
For example, new hires would be likely to be people who can help the psychopath achieve their personal aims and objectives rather than aid the company. Anyone astute enough to potentially be a challenge to the psychopathic employee would not be hired by them in the first place.
Without exception, psychopathic people love money and they are more motivated by it than other people are.
Unlike the rest of the population, psychopaths are uninterested in higher values such as close emotional connections with family and friends, and much more focused on money and materialism. Seen through this lens, the appeal of the corporate banking sector – and the salaries and bonuses it offers – to people with these traits soon becomes clear.
