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Can an Ethical Revival of Prudence Within Prudential Regulation Tackle Corporate Psychopathy?

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  • Alasdair Marshall
  • Denise Baden
  • Marco Guidi

Abstract

The view that corporate psychopathy played a significant role in causing the global financial crisis, although insightful, paints a reductionist picture of what we present as the broader issue. Our broader issue is the tendency for psychopathy, narcissism and Machiavellianism to cluster psychologically and culturally as ‘dark leadership’ within global financial institutions. Strong evidence for their co-intensification across society and in corporations ought to alarm financial regulators. We argue that an ‘ethical revival’ of prudence within prudential regulation ought to be included in any package of solutions. Referencing research on moral muteness and the role of language in framing thoughts and behaviours, we recommend that regulators define prudence in an explicitly normative sense, an approach that may be further strengthened by drawing upon a widely appealing ethic of intergenerational care. An ethical revival of prudence, we argue, would allow the core problems of greed and myopia highlighted by corporate psychopathy theory to be addressed in a politically sensitive manner which recognises the pitfalls of regulating directly against corporate psychopathy. Furthermore, it would provide a viable conceptual framework to guide regulators along the treacherous path to more intrusive cultural regulation. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Alasdair Marshall & Denise Baden & Marco Guidi, 2013. "Can an Ethical Revival of Prudence Within Prudential Regulation Tackle Corporate Psychopathy?," Journal of Business Ethics, Springer, vol. 117(3), pages 559-568, October.
    • Handle: RePEc:kap:jbuset:v:117:y:2013:i:3:p:559-568
    DOI: 10.1007/s10551-012-1547-4
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    References listed on IDEAS

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    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    2. Clive Boddy, 2011. "The Corporate Psychopaths Theory of the Global Financial Crisis," Journal of Business Ethics, Springer, vol. 102(2), pages 255-259, August.
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    Cited by:

    1. Alasdair Marshall & Melanie Ashleigh & Denise Baden & Udechukwu Ojiako & Marco Guidi, 2015. "Corporate Psychopathy: Can ‘Search and Destroy’ and ‘Hearts and Minds’ Military Metaphors Inspire HRM Solutions?," Journal of Business Ethics, Springer, vol. 128(3), pages 495-504, May.
    2. Fabien Martinez, 2019. "On the Role of Faith in Sustainability Management: A Conceptual Model and Research Agenda," Post-Print hal-02887640, HAL.
    3. Benjamin R. Walker & Chris J. Jackson, 2017. "Moral Emotions and Corporate Psychopathy: A Review," Journal of Business Ethics, Springer, vol. 141(4), pages 797-810, April.
    4. Fabien Martinez, 2022. "Organizational change in response to environmental complexity: Insights from the business model innovation literature," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2299-2314, July.
    5. Okechukwu Ethelbert Amah, 2022. "The Role of Political Prudence and Political Skill in the Political Will and Political Behavior Relationship," Journal of Business Ethics, Springer, vol. 176(2), pages 341-355, March.
    6. Fabien Martinez, 2019. "On the Role of Faith in Sustainability Management: A Conceptual Model and Research Agenda," Journal of Business Ethics, Springer, vol. 155(3), pages 787-807, March.

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