IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v117y2013i3p559-568.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10551-012-1547-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-012-1547-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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.
    3. Fabien Martinez, 2019. "On the Role of Faith in Sustainability Management: A Conceptual Model and Research Agenda," Post-Print hal-02887640, HAL.
    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alex Cukierman & Anton Muscatelli, 2001. "Do Central Banks have Precautionary Demands for Expansions and for Price Stability?," Working Papers 2002_4, Business School - Economics, University of Glasgow, revised Mar 2002.
    2. Durmaz, Tunç, 2016. "Precautionary Storage in Electricity Markets," Discussion Papers 2016/5, Norwegian School of Economics, Department of Business and Management Science.
    3. Christian Urom & Gideon Ndubuisi & Jude Ozor, 2021. "Economic activity, and financial and commodity markets’ shocks: An analysis of implied volatility indexes," International Economics, CEPII research center, issue 165, pages 51-66.
    4. C. Lee, 1998. "Life Cycle Savings in the United States, 1900-1990," CPE working papers 0014, University of Chicago - Centre for Population Economics.
    5. Francisco Martínez-Mora & M. Socorro Puy, 2009. "Off-the-peak preferences over government size," Working Papers 2009-9, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    6. Eeckhoudt, Louis & Schlesinger, Harris, 2008. "Changes in risk and the demand for saving," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1329-1336, October.
    7. Chan, Kalok & Yang, Jian & Zhou, Yinggang, 2018. "Conditional co-skewness and safe-haven currencies: A regime switching approach," Journal of Empirical Finance, Elsevier, vol. 48(C), pages 58-80.
    8. Haliassos, Michael & Hassapis, Christis, 2001. "Non-expected Utility, Saving and Portfolios," Economic Journal, Royal Economic Society, vol. 111(468), pages 69-102, January.
    9. repec:tiu:tiutis:bdbe10dd-649c-4521-ab28-7aa051a5bf82 is not listed on IDEAS
    10. Mario Maggi & Umberto Magnani & Mario Menegatti, 2006. "On the relationship between absolute prudence and absolute risk aversion," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 29(2), pages 155-160, November.
    11. Mr Clive Boddy & Mr Derek Bond & Dr Elaine Ramsey, 2010. "Projective Techniques Are they a Victim of Clashing Paradigms," Accounting, Finance and Economics Research Group Working Papers 1, Ulster Business School.
    12. Miao, Jianjun & Wang, Neng, 2007. "Investment, consumption, and hedging under incomplete markets," Journal of Financial Economics, Elsevier, vol. 86(3), pages 608-642, December.
    13. repec:dau:papers:123456789/11094 is not listed on IDEAS
    14. Mervyn Allister King, 1993. "Debt Deflation: Theory and Evidence," FMG Discussion Papers dp175, Financial Markets Group.
    15. Andrew B Abel & Stavros Panageas, 2023. "Precautionary Saving in a Financially Constrained Firm," The Review of Financial Studies, Society for Financial Studies, vol. 36(7), pages 2878-2921.
    16. Thomas Eichner & Rüdiger Pethig, 2015. "Efficient Management of Insecure Fossil Fuel Imports through Taxing Domestic Green Energy?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(5), pages 724-751, October.
    17. van Hoorn, Andre, 2015. "Organizational Culture in the Financial Sector: Evidence from a Cross-Industry Analysis of Employee Personal Values and Career," MPRA Paper 67222, University Library of Munich, Germany.
    18. Claudio A. Bonilla & Pablo A. Gutiérrez Cubillos, 2021. "The effects of ambiguity on entrepreneurship," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 63-80, February.
    19. Michel M. Denuit & Louis Eeckhoudt, 2010. "A General Index of Absolute Risk Attitude," Management Science, INFORMS, vol. 56(4), pages 712-715, April.
    20. Jemey, Nursyuhada binti & Kasim, Nor Hasniah binti, 2023. "The Impact of Covid-19 on Consumption Patterns Among Malaysian Youths," MPRA Paper 118841, University Library of Munich, Germany, revised 26 Sep 2023.
    21. Heeho Kim, 2013. "Uncertainty and risk premium puzzle," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(1), pages 62-79, January.
    22. Emilio Fernandez-Corugedo, 2004. "Consumption Theory," Handbooks, Centre for Central Banking Studies, Bank of England, number 23, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:117:y:2013:i:3:p:559-568. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.