Psychopaths in the C-Suite – Myth or Reality?
Thomas Middelhoff at Arcandor, Richard Fuld at Lehman Brothers, or Jeffrey Skilling at Enron – these CEOs, who bear a large part of the responsibility for major corporate scandals, are often portrayed as psychopaths. The cliché of the monster in pinstripes comes up again and again in films, media reports, and even academic research. A researcher at WU Vienna has now shown that, in reality, there is not much to it.
Günter K. Stahl from the Institute for International Business at WU Vienna and his co-authors Milda Zilinskaite and Stephan Döring took a closer look at six CEOs known for their involvement in fraud cases of historic proportions: Using the Psychopathy Checklist-Revised (PCL-R), a standard instrument for assessing psychopathic traits, his study shows that the CEOs’ scores are above the population average – but below the diagnostic threshold for psychopathy.
The Dark Triad
In addition, the study also examines whether the CEOs exhibit the so-called Dark Triad. This refers to the three personality traits of Machiavellianism, narcissism, and psychopathy. The results show Machiavellian tendencies in all six CEOs and strong narcissistic traits in two of them.
The study has not found any evidence of “dark” behavioral patterns in childhood or adolescence in the individuals studied. Their dark tendencies seem to be limited to the professional sphere. This rules out the diagnosis of a personality disorder and raises the question of what role the company plays in bringing out dark personality traits in CEOs.
An in-depth examination of the ethical infrastructures of the six companies before and at the beginning of these CEOs’ terms of office reveals ineffective internal governance, flawed incentive systems, a lack of rules of conduct, dysfunctional corporate cultures, and a strong pressure to conform within the top management team. This suggests that the wrongdoing was, in a sense, systemic. The study concludes that there is a bidirectional and interactive relationship between a CEO’s personality and their company: A lack of ethical infrastructure can encourage CEOs to let dark tendencies influence their behavior. In turn, these tendencies can further weaken the ethical infrastructure of the company and make it vulnerable to misconduct.
The cases studied
For this study, the researchers applied the PCL-R to six CEOs: Jeffrey Skilling (Enron), Bernard Ebbers (WorldCom), Dennis Kozlowski (Tyco International), Richard Fuld (Lehman Brothers), Calisto Tanzi (Parmalat), and Thomas Middelhoff (Arcandor). With the exception of Richard Fuld, all of them have been convicted in court. Several of them received some of the highest sentences ever imposed for white collar crime and were still in prison at the time this study was conducted.
The results of the study are summarized in a short research video.
1 Minute, 1 Paper: Research in a nutshell
WU’s “1 Minute, 1 Paper” video series presents research results in an accessible and concise format. This video is now available at: https://short.wu.ac.at/1M1P-stahl. Further “1 Minute, 1 Paper” videos are available on WU’s YouTube channel: https://short.wu.ac.at/1M1P
The videos can be embedded on external websites free of charge.
Günter K. Stahl, Milda Zilinskaite, Stephan Döring: Psychopathy in the C-Suite: Myth or Reality?
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