Around 1% of the adult population are defined as psychopaths, meaning they possess no conscience, shame, guilt, or ability to experience love for or feel empathy towards other people.

Recent research from Dr. Clive Boddy, a pioneer in the field of “corporate psychopathy,” looked at how the financial industry can identify, manage and, if necessary, remove individuals who could harm their firms and entire sectors.

Dr. Boddy discusses why psychopaths often appear to be potentially effective leaders, how they get to the top and what they do once they have achieved leadership.

This research was published in the International Journal of Market Research.

The term corporate psychopath refers to high-performing psychopaths who work in corporate and political settings.

According to Dr. Boddy, these individuals present a huge threat to the stability of companies, sectors, and potentially entire economies.

This research highlights the warning signs that researchers and investors in the financial industry, such as pension funds, and in other sectors, can look for.

These include superficial charm and intelligence, pure rationality, a cheating personality, a lack of remorse, irresponsibility, and being emotionally shallow.

It is possible to look back with hindsight at some individuals in history that have committed crimes or destabilized industries.

However, industries, in the influential financial sector, have a particular responsibility to be more vigilant in spotting these individuals and ensuring they cannot endanger our economy and wider society.

As Boddy says, “We know that corporate psychopaths are disproportionately likely to hold very senior positions in business and industry, largely because of their apparently social personality traits. However, their ruthlessly self-serving behavior has the potential to bring down entire sectors in extreme cases. The quest for money, power and control is what drives the corporate psychopath, and they are ruthless and efficient in gaining these.”

Boddy, explains what makes these individuals tick and how to identify them before they cause serious damage.

Being able to identify these individuals could also play an important role in informing investment decisions.

Firms without corporate psychopaths in them are more likely to be viable, sustainable, and less likely to collapse.