- Psychopaths are so prevalent in upper management positions that psychologists have a term for them: "corporate psychopaths."
- While some psychopathic traits can be useful to leaders and their companies, evidence suggests that corporate psychopaths often make workplaces more hostile, less productive, and ultimately less profitable.
- A full-blown corporate psychopath in a key position of power likely will be disastrous for the company.
The term often evokes a mental image of a ruthless criminal or a serial killer. It’s a reasonable stereotype. Between one quarter and one third of convicted murderers are psychopaths, along with almost nine in ten serial killers. These heinous offenders earned that diagnosis because they lie and manipulate to get what they want. They are regularly reckless and impulsive, have an outsized ego, are quick to anger, and lack empathy for others. Despite all this, they can often be charming and even likable.
But while most violent criminals are psychopaths, most psychopaths aren’t criminals. These successful psychopaths inhabit a variety of niches in civilized society, but one of the most common places they end up is in corporate management. In fact, psychopaths are so common among the upper echelons of companies that psychologists have concocted a name for them: “corporate psychopaths.”
Clive Boddy, an associate professor at Anglia Ruskin University, originated the term and has been researching the effects of toxic, psychopathic managers since 2005. “Corporate psychopaths are… simply those psychopaths who exist successfully in society and work within corporations,” he wrote in a paper published in 2015. “They are conceptualized as highly career-oriented but ruthless, unethical, and exploitative employees.”
For a popular, yet fictitious example of corporate psychopaths, look no further than the hit HBO show Succession. The comedy drama depicts the exploits of the Roy family, leaders of the media conglomerate Waystar-Royco. As they strive to preserve their wealth and power, the Roys broadly act with little regard or care for anybody other than themselves — especially those who are not as obscenely wealthy as they are. With only minor deviations, each family member has many or all of the characteristics of a corporate psychopath. They are initially charming, poised, and calm, yet they ultimately reveal themselves to be untruthful, cheaters, egocentric, remorseless, emotionally shallow, interpersonally unresponsive, irresponsible, and lacking in self-blame.
But Succession is just a television show and not written as a faithful depiction of real-life corporate psychopaths. So how many psychopaths really exist in corporate management? And what effects — positive or negative — do they have on their firms?
While it’s difficult to estimate their prevalence, a few researchers have taken a stab at it. Simon Croom, a professor of supply chain management at the University of San Diego School of Business, is one of them. “My colleagues and I found in our research that 12% of corporate senior leadership displays a range of psychopathic traits,” he shared in an article published to Fortune Magazine in 2021. Robert D. Hare, a professor emeritus of psychology at the University of British Columbia and creator of the primary diagnostic tool for psychopathy, the Hare psychopathy checklist, found a smaller prevalence of just 3.5%.
Both estimates suggest that psychopaths are far more prevalent in corporate management than in the general population — about 3.5 to 12 times more. And they may be even more common in the top office, with one analysis finding that one in five CEOs could be a corporate psychopath.
So then, what happens when a psychopath is promoted into a corporate position of power? Because these individuals can be charismatic, persuasive, and creative, it’s possible they could excel in their roles and propel their companies to great profit. Researchers, however, have broadly found the opposite.
Corporate psychopaths’ malicious traits outweigh their positive ones. They often bully others, create conflict, discourage subordinates’ ideas, behave unethically, and even urge others to do the same. Their actions can result in a hostile workplace environment, increasing competition, stress, absenteeism, disengagement, and even theft. “Deviant workplace behaviors cause losses of billions of dollars across all business organizations, and much of this behavior stems from corporate psychopaths in positions of leadership,” researchers wrote in 2015.
That same year, Boddy published a lengthy case study describing an instance of an apparent psychopath becoming CEO of a nonprofit with 70 employees. His behaviors started exacting a detrimental toll within weeks, which compounded over the ensuing years of his reign. Fundraising numbers fell. Productivity declined. Employee sick days skyrocketed. Yet convinced of his leadership prowess, he repeatedly and persuadingly reported a glowing picture to the board of trustees, while those under him knew the opposite was true. The psychopathic CEO apparently didn’t care as he had no plans to remain in the role for long. Rather, he intended to use it as a springboard into a political career. Quickly “climbing the ladder” or moving on to other organizations is a frequent aim of corporate psychopaths, Boddy noted.
Did psychopaths cause the Global Financial Crisis?
Some psychologists have also theorized a much grander example of the dangers of corporate psychopaths: blaming them in part for the Global Financial Crisis of 2008.
“The theory basically states that corporate psychopaths, drawn to corporate banks in disproportionate numbers because of the material rewards on offer, played an important part… through their participation in the corporate banking sector and their influence on the culture, ethics, and risk profiles of the banks that employed them,” Boddy explained.
A 2019 analysis turned up empirical evidence of corporate psychopaths’ potential harms. A trio of UK researchers attempted to quantify company performance based upon psychopathic characteristics of senior management. Many factors including auditing problems and reduced charitable giving were linked to lower shareholder returns and reduced earnings and revenue growth.
There could be two possible channels through which boardroom psychopathy could affect business performance, the authors explained.
“First… counterproductive work behavior in response to bullying and exploitation, inability to retain key staff members, fraudulent activities and deliberate chaos created by psychopaths, as well as their parasitic behavior can all contribute to a reduction in profitability. Second, psychopathic attributes of decision making may potentially lead to reputational damage. Media controversies, audit problems, lack of involvement in charitable giving and corporate social responsibility activities can put the company into disrepute and lower the value of its intangible assets.“
The pros and cons of psychopathy
Psychopathy, of course, is on a spectrum, and every person exhibits at least some psychopathic traits. A CEO who scores higher in emotional detachment, for instance, may be more successful than others because it allows them to make more rational decisions in hiring, firing, and deal-making. But in the end, a full-blown corporate psychopath in a key position of power likely will be disastrous for the company because they will ultimately prize their own selfish desires over the needs of the business and its employees.