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Wednesday, September 24, 2008
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Regarding your column on the inept and callous management in financial institutions, I'm sure you must be aware of the research (especially Robert Hare's) on "corporate psychopaths." The unprecedented greed and reckless risk-taking we've observed are certain evidence of many of the traits on the psychopathy checklist. Given the size of the rewards, it's no surprise that financial services attracts more than its share of these individuals.

In spite of the disproportionate damage they do, I'm told it has been nearly impossible to get corporate America to focus on the small percentage of evildoers who run our corporations and our economy into the ground. Perhaps billions (or is it trillions?) of dollars of losses will get someone's attention. Perhaps it will be HR.

Jean Herreman

Principal, Research, Surveys and Knowledge Management

Buck Consultants

Atlanta, GA 30339

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Great article on the financial firms. You also need to look at the role of sub-prime lenders, the building firms that pushed these risky mortgages, the appraisers that bent the rules, the lawyers who did the house closings, the realtors who knew better, and the legislators who looked the other way.

It was not just imprudent and sometimes illegal behavior, it was also a systems effect that needs to be understood.

Another great story is how AIG which has a service that insures and manages these types of failures, was the biggest loser.

What about the folks in Leadership Development and Ethics that work at these firms?  What did they know and when did they know it? Why are they powerless to lead change?

Thanks for the article. Do more.

Brian Hackett

Founding Partner - Apex Performance

Director - The Learning Forum

Charlotte, NC  

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I thought SOX was supposed to address these issues. Does this mean additional regulations and does that not mean more incentive to locate off shore and raise capital in environments conducive to making money?

Tom McCarten

Bankten Capital Management Ltd.

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I read with interest 'HR Lessons from Investment Banking' By Peter Cappelli  

I sensed he was passing the buck a bit, implying that the education mills shouldn't be also held responsible for the culture in the financial sector. It seems as though we will not get to the end of this until every facet including the business schools take responsibility for their role in this.  

If all academia reacts the way Peter sounded I will be very disappointed. This is more a time for introspection than pointing the finger at someone else.  

Pete Chatfield

Peter Cappelli's response:

I appreciate the message, but you may have an unrealistic idea about what goes on in business schools. Our students come to us about age 28, when most of their values are already formed. 

We do have required ethics courses that teach the obvious downsides to lying and cheating. the people who are messing up in this case are ones who have left school 20 years or so before. We just don't have that much influence over them. 

As far as I can tell, those who have been caught up in these scandals are just as likely to have not been to business school as to have been there.

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Excellent article, brilliant -- thank you very much.

Marc Ruede

JT International S.A.

Geneva, Switzerland

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Great article on "HR lessons from investment banking" on Human Resource Executive Online.  Thank you, you are spot on!  When will organisations learn these lessons?  

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Your thoughts are in line with my article today on Management Issues.com, "Did Plato have the answers to Wall Street's problems?" and previously, "What do you get when you pay people to perform?"  

This is the first time I have come across your articles and I appreciate your thinking and style very much.  

Bob Selden

The National Learning Institute

Crows Nest, Australia

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Thank you for your insightful article. Having worked for a global financial services organization, I have felt exactly the same. This is a culture where targets are everything.

In fact, the pressure to perform is so great that many, not finding anywhere to go, engage in unethical practices in an effort to meet those targets and get those much coveted incentives and recognition. No thought is given while determining targets as to whether these can achieved in an ethical manner. Thus you have a culture where those who achieve targets (regardless of how) are rewarded and those who do not are not just not rewarded but even punished and looked down upon.

So, then, what kind of role models are created for the up-and-coming leadership of the company?  Money is the only motivation. Everything else is immaterial. This culture promotes greed over ethics.  

I agree that the drive for making money is what should make businesses tick. As a matter of fact, it is this drive that results in efforts to increase efficiency and to search for new and innovative products and services. But this needs to be tempered by ethics.  

Moreover, employees need to be treated like human beings rather than money making machines.  

Mahavir Pati

Business Development Professional

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