Post on 26-Jul-2020
MAP
Cynthia Mathieu
Professor
Université du Québec à Trois-Rivières
Why seemingly honest people do dishonest things
MAP
What does honnesty look like?
MAP
How can we measure honesty?Is not the right questionThe right question isHow high is honesty on the
list of competencies we look
for in leaders?
MAP
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Success
MoneyPossessions
Position/Title
Fame
Power
« All that glisters is not gold;
Often have you heard that told:
Many a man his life has sold
But my outside to behold… »
Williams Shakespeare, The Merchant of Venice6
GREAT LEADERS MAKE
UNFORGETTABLE FIRST
IMPRESSIONSForbes Magazine (2014)
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Those Who Make
Unforgettable First Impressions
Get Hired as Leaders
Selection/promotion
processes
Criminal justice
system
Victims
« The Devil is more
devilish when
respected »Elizabeth Barret Browning
How we define success
as a society has
implications for:
BASIC
The typical organization loses 5% of
annual revenues to
fraud
Median loss in Canada was
$154,000
Victim organizations
that lacked anti-fraud controls suffered
greater losses
Cost of Organizational Fraud 11
Association of Certified
Fraud Examiners (2016)
Many fraudsters do not limit themselves to a single
type of fraud; they steal from
their employers
wherever the opportunity presents
itself.
When the owners or executives committed fraud, the median
damage was more than 10X worse
Annualglobal loss of US$3.7 trillion
Cost of Organizational Fraud 12
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Despite the cost of occupational
fraud…
40.7%
of victim organizations did not
refer the case to law
enforcement
Why don’t organization come forward and report
ocupational fraud?
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Shame
Bad publicity
Blame
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Dark personalities and
occupational fraud
More plea bargains prior to trial
No harsh sentencing
Not an « innocent crime »
Red-collar crime
Underlying cause: psychopathy
“The capacity to kill without remorse was a seed
inherent in the red-collar criminal that germinated when
the proper conditions surfaced.” (Perri & Lichtenwald, 2007, p.21)
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CORPORATE PSYCHOPATHY “RED FLAG”
(BABIAK, & HARE, 2006)
Inability to form a team
Inability to share
Disparate treatment of staff
Inability to tell the truth
Inability to be modest
Inability to accept blame
Inability to act predictably
Inability to react calmly
Inability to act without aggression
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CORPORATE PSYCHOPATHY: PREVALENCE RATE
Babiak, Neumann & Hare (2010)
PCL-R
(Hare, 2003) 203 upper-level
managers
Prevalence rate:
3.9% (General
population: 1%)
Positively associated with
ratings of
Charisma/presentation style;
creativity, good strategic
thinking and communication
skills
Negatively associated with
ratings of
responsibility/performance;
being a team player,
management skills and overall
accomplishments
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PSYCHOPATHY TRAITS VS
LEADERSHIP ABILITIES
PSYCHOPATHIC FEATURES LEADERSHIP ABILITIES
Charm and charisma Leadership
Talking about lofty ideas/goals Visioning
Conning and manipulation Influence, Persuasion
Lack of remorse of guilt Can make hard decisions
Impulsivity Courage
Has no emotions Good emotional control
Grandiose self-appraisal Self-confidence
Thrill-seeking and need for stimulation Ability to multi-task
Adapted with permission from Babiak, 2001
Psychopathy in
the workplace
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How do they enter
organizations?
The most widely used
tool for employee
selection is the
unstructured interview
(Buckley et al, 2000)
Impression
management tactics
Verbal
Non-verbal
Great
haircut
Nice clothes
Confident
look/walk
… No sign of
anxiety
Selection
Interview
Biases
Non-verbal
IM tactics Attractiveness
Selection Interview
Biases:
Verbal IM tactics
Praising interviewer
Self-promotion
Overclaiming (DT)
Similar tactics can be
used to get positive
performance appraisals Flattery
Opinion conformiy
Which may lead to promotions
into leadership positions…
Differences between dark
and good leaders :
The intentions behind their
decisions and actions
Risk taking/taking advice
Empathy
People-oriented leadership
Humility
Short-term success
does not guaranty
long-term prosperity
Differentiating the good from the bad
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Association of Fraud Examiners, 2016
Structured Interview
Psychometric testing
Background check
Entry phase: What should be done
Don’tletthemin
B-Scan VS PCL-R Factors and Facets
Behavioral red flags
displayed by perpetrators
According to the Association of
Certified Fraud Examiners (2016)
Living beyondmeans
Financial difficulties
Divorce/familyproblems
Unusually close association withvendor/customer
Complain about inadequate pay
Employee
Living beyondmeans
Unusually close association withvendor/customer
Financial difficulties
Control issues, unwillingness to share duties
Irritability, suspiciousnessor defensiveness
Manager
Living beyondmeans
Wheeler-Dealer attitude
Financial difficulties
Control issues, unwillingness to share duties
Unusually close association withvendor/customer
Owner/
Executive
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Performance appraisal
360 degree evaluations
Look for behavioral red flags
Dealing with dark personalities on the insideHave a hotline in
place for tips and
make sure to
protect informant
confidentiality
Build an organizational
culture based on
transparency and have
clear rules on
occupational fraud
Work with HR to identify
individuals presenting
“red flags” (i.e. poor
performance reviews,
harassment and abusive
leadership)
Act quickly when
you detect fraud.
The longer a fraud
lasts, the greater the
financial damage.
Keep a close watch on employees and managers
who go to the office outside of work hours
FBI on Corporate psychopathy
Investigators should
familiarize themselves with the typical traits
and characteristics
of psychopaths.
Understand the manipulation techniques
used to create and manage the
psychopathic bonds
established with victim
organizations.
The psychopath’s
reputations, as judged by those
in power with whom they
have bonded, known as
patrons, often provide added protection from
closer investigation.
As a result, the investigator may need to build a case
with management
for the use and broad
application of more
sophisticated techniques.
FBI (2012) The Corporate Psychopath (Babiak & O’Toole)
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BASIC
BASIC
www.graphicriver.net/goashape
The world is a dangerous place
to live; not because of the
people who are evil, but
because of the people who
don’t do anything about it.
Albert Einstein
cynthia.mathieu@uqtr.ca