Friday 29 July 2016 5:03 pm

Psychopaths in the office, and why Theresa May’s big business ethics shakeup is going nowhere

I read an article the other day that measured Donald Trump against the Hare Psychopathy Checklist. No prizes for guessing the result. But in this age of big characters in both business and politics, how many more high-profile individuals couldn’t pass the test?

According to a sample study of 203 corporate professionals selected by their companies to participate in management development programmes in 2010, three per cent scored in the psychopathy range. In the general community, only one per cent score this highly. So, it’s quite possible that you’re working with a bona fide psychopath right now. Today.

Clearly, I’m not going to start accusing anyone of being a psychopath. I’m not keen on spending the next 10 years fending off legal action. But what is interesting – and legal – is the way we view the dominant psychological traits and behaviours of successful business and political leaders. And the problem these traits are going to give anyone trying to raise the business-ethics bar.

Your persuasion is my manipulation

When viewed from outside, personal character traits swing both ways. Decisive leaders can be seen as dictatorial. Highly focused leaders are often accused of lacking empathy.

If you support that person, their behaviours are utterly benign and make that individual a force for all that is good. If you oppose them, they exhibit character corruptions of the very worst kind which can only ever lead to disaster for all mankind. There are no half measures here.

Can regulation make businesses ‘good’?

Bearing in mind this dual-perception we all have of our leaders and their actions, is business regulation the answer to raising the ethical bar? The short answer is no.

Businesses are led by people. There is no such a thing as a “good person”, because there is no such thing as a “bad person”. Bad people do good things and vice versa. And the same is true for businesses.

So while Theresa May has set herself the task of shaking up boardrooms and tackling, by default, business ethics, this is the policy that will dog her premiership. I applaud it but it’s going nowhere. It is her Big Society.

Millions of words and some of the world’s largest brains have been dedicated to how to raise ethical standards in business.

Don’t get me wrong, much great work has been done over the last 50 years via legislation to protect workers and prevent corporate and financial abuse.

But at the end of the day you have to factor in the Reactance Theory: you can only regulate so far in order to try and prevent unethical business behaviour.

There comes a point beyond which regulation is seen as unjust or excessive by the very people who are expected to implement it and abide by it – and at that point you provoke the opposite reaction.

Leaders start to resent what they see as you trying to curtail their freedom and they begin to flout the rules. Slowly at first, but once it takes hold, it snowballs.

To have any chance at all, new regulations need to take into account that it’s people and not businesses that need regulating.

However, successful leaders who have reached the top all suffer from The Galatea Effect – deep down, they all believe they’re more intelligent, more capable and already have much higher ethical standards than those around them – whether this is true or not.

They believe they can do anything, and they’ve proved to themselves that they can; their success proves they are right.

So in my view, you just can’t regulate against this kind of self-esteem. You can try, but you will always fail.