By Steve Conley, Founder, Academy of Life Planning
Author’s Note: A Personal Prelude
In December 2007, just months before the Global Financial Crisis erupted and Royal Bank of Scotland Group (RBS) became one of the most infamous taxpayer bailouts in history, I was made redundant from my role as Head of Savings and Investments Strategy. The stated reasons were both striking and revealing: first, that I had successfully delivered a five-year strategy and could now be replaced by someone on half the salary to implement it; and second—more disturbingly—that I wasn’t “alpha-male enough.”
That moment laid bare a toxic undercurrent within corporate culture. The HR manager, seated beside my boss during the redundancy meeting, didn’t flinch at the delivery of this peculiar verdict. It was clear: I didn’t conform to a culture that rewarded dominance over decency. In truth, I wasn’t what I now understand to be a “corporate psychopath”—and I didn’t fit the mould.
Two weeks later, I joined HSBC as Head of Investments. When I relayed the reason for my departure from RBS, they simply responded: “Not being a psychopath won’t affect our decision to hire you.” That remark, equal parts humour and truth, remains etched in my memory—because it confirmed what I’d sensed: that our financial institutions were, and in many ways still are, shaped by personalities and values misaligned with public trust and long-term well-being.
This experience is what drives my inquiry into the rise of “successful psychopaths” in finance—and why we must take the issue seriously.
Introduction
The financial services industry has come under scrutiny for the potential influence of individuals with psychopathic traits in its ranks. Psychopathy in this context refers to a cluster of personality characteristics – such as lack of empathy, superficial charm, deceitfulness, and manipulative behaviour – that can drive unethical or harmful actions. Recent studies suggest that these “corporate psychopaths” or “successful psychopaths” can attain high positions in finance and may contribute to misconduct or even financial instability [psychology.org.au] [pmc.ncbi.nlm.nih.gov].
This report examines the prevalence of psychopathic traits among financial professionals compared to other groups, summarises academic findings on their impact, and evaluates whether regulators (particularly the UK’s Financial Conduct Authority, FCA) have measures in place – such as screening or accountability frameworks – to mitigate risks associated with psychopathic personalities.
Prevalence of Psychopathic Traits in Finance vs. Other Sectors
Research indicates that the prevalence of psychopathic traits is higher in corporate and financial domains than in the general population. In the general community roughly 1% of people meet the clinical criteria for psychopathy, whereas in prison populations this rate is about 20% (one in five) [psychology.org.au]. Within corporate leadership, estimates typically fall between these extremes. For example, studies have found that around 3–4% of business executives show psychopathic levels of traits – several times the general population rate [pmc.ncbi.nlm.nih.gov]. In some corporate samples, the proportion can be much higher: one study of 261 corporate professionals (in supply chain management roles) found that 21% had clinically significant psychopathic traits, a figure comparable to that seen in prisons [psychology.org.au].
Focusing on financial services specifically, experts have warned that a notable minority of finance professionals may exhibit psychopathic tendencies. Discussions at a recent science forum pointed to findings that as many as 10% of individuals working in financial services might possess significant psychopathic traits [themunicheye.com]. Likewise, psychologists have observed that employees in major financial hubs tend to score higher on psychopathic trait measures than the general public, often coupled with lower emotional intelligence[themunicheye.com]. In summary, while psychopathic personalities constitute a small fraction of any population, evidence suggests they are disproportionately represented in high-power business sectors – including finance – at levels approaching or exceeding those found in other high-risk groups.
Traits and Behaviour of Corporate Psychopaths
“Successful psychopaths” in business are individuals who exhibit the core features of psychopathy yet manage to rise to influential positions without ending up in criminal custody[psychology.org.au]. They often come across as charismatic and charming, but are insincere and egocentric, using superficial charm and deceit to manipulate others [psychology.org.authemunicheye.com]. Common traits include a lack of empathy or remorse for others, grandiose self-worth, and a ruthless focus on personal gain. Such personalities might thrive in competitive, high-stakes environments like finance, where confidence and risk-taking can be rewarded. However, their modus operandi – which can involve playing people off against each other and creating chaos in the workplace – often leaves a trail of toxicity [psychology.org.au]. Co-workers and subordinates under psychopathic managers frequently experience high stress or bullying, and the organisational culture can turn dysfunctional.
Critically, while these individuals may initially impress with bold decision-making or apparent competence, researchers note that psychopathic leadership does not translate into healthy or sustainable performance [themunicheye.com]. Any short-term successes (e.g. fast promotions or high-risk profits) are often overshadowed by longer-term damage to team cohesion, ethical standards, and even the bottom line of the firm. The most prototypical psychopathic traits identified by experts – remorselessness, lack of empathy, self-centeredness, manipulativeness, deceitfulness, insincerity, and shallow emotions – reliably flag individuals who pose such risks in workplace settings [pmc.ncbi.nlm.nih.gov].
Impact on the Financial Services Industry
The presence of psychopathically inclined individuals in finance can have serious implications. Studies link higher psychopathy scores among financial professionals to unethical behavior and elevated risk-taking. For instance, the term “financial psychopath” has been used to describe figures behind major frauds and collapses. Notoriously, Bernie Madoff (perpetrator of a $50 billion Ponzi scheme) and Enron’s CEO Ken Lay (mastermind of an accounting fraud leading to what was the largest bankruptcy of its time) have both been analysed as likely psychopaths based on their behaviors [pmc.ncbi.nlm.nih.gov]. In these cases, traits like chronic lying, lack of remorse, and blame-shifting were evident, and psychopathy was identified as a contributing factor to the scandal [pmc.ncbi.nlm.nih.gov]. Some scholars have even argued that a number of top executives on Wall Street – whose reckless actions contributed to the 2007–2008 financial crisis with trillions in losses – fit the psychopathic profile [pmc.ncbi.nlm.nih.gov]. These examples underscore how a psychopathic leader’s prioritisation of personal power and profit over honesty or prudence can lead to catastrophic outcomes for investors, employees, and the economy at large.
Even outside of headline-grabbing fraud, empirical evidence suggests psychopathic traits in finance are correlated with poor organisational outcomes. One analysis noted that while finance professionals with higher psychopathy often achieve higher compensation and quicker advancement (likely due to aggressive self-promotion and risk-taking), their companies tend to suffer more frequent ethical breaches and lower long-term returns [themunicheye.com]. In a striking longitudinal study, mutual fund managers identified with strong psychopathic traits underperformed their more empathetic peers by a significant margin – delivering annual returns roughly 30% lower over a ten-year span [themunicheye.com]. This performance gap highlights that psychopathic leadership, despite its confidence and decisiveness, may undermine prudent financial management and erode shareholder value. The toxic work environment such individuals create can also drive away talent and reduce teamwork and innovation.
Moreover, corporate psychopaths show a pronounced propensity for fraudulent and illegal behaviour when given power over financial decisions. A survey of auditors found that a majority had encountered executives or managers they believed to be psychopaths during investigations – and 43% of those auditors reported that such psychopathic managers had engaged in fraud under their watch [sciencedirect.com]. This aligns with the observation that many high-flyer psychopaths will ignore rules or exploit loopholes if it serves their interest. As one report noted, these individuals are often willing to trigger financial crises or harm clients if it benefits them, something only a very small fraction of non-psychopathic people would ever contemplate [themunicheye.com]. The broader impact is not just on single firms but on market integrity: a concentration of amoral decision-makers in banking or investment roles heightens systemic risks. For this reason, industry observers emphasise vigilance. Ensuring that greed-driven, unempathetic personalities are kept in check is seen as vital to protecting consumers and maintaining trust in financial markets [themunicheye.com].
Academic Studies and Theories Linking Psychopathy to Finance
In the past two decades, academics in psychology and business ethics have increasingly studied the phenomenon of corporate psychopathy, with a subset focusing on the financial sector. A foundational work in this area is Snakes in Suits (Babiak & Hare, 2006), which alerted that psychopaths can thrive in corporate environments by camouflaging their antisocial behavior within corporate culture [pmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.gov]. Building on such insights, researchers have attempted to quantify and compare psychopathic traits across different groups. Belinda Board and Katarina Fritzon (2005) conducted an early study comparing senior business managers to psychiatric and criminal populations; intriguingly, they found that while the managers did not have criminal histories, they scored higher on certain psychopathic traits (like narcissism and manipulativeness) than the criminal group in the study. This suggested that some psychopathic tendencies manifest in corporate success rather than criminality.
More recently, Clive R. Boddy has advanced the “corporate psychopaths theory” of major financial failures. He posits that the global financial crisis of 2008 was exacerbated by psychopathic executives whose reckless disregard for risk and ethics precipitated the collapse of companies and market stability [pmc.ncbi.nlm.nih.gov]. Boddy’s analyses of cases like Enron and the subprime meltdown argue that if a few key decision-makers lack conscience and regard for others, they can drive an entire organisation into the ground while escaping (at least initially) the detection one might expect if they were committing crimes in a non-corporate setting [pmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.gov]. This work has spurred debate on how much blame for financial scandals should be placed on individual pathology versus broader system failures, but it has undoubtedly brought the psychological profile of leaders into the conversation about financial regulation and corporate governance.
Another strand of research looks at the “Dark Triad” of personality traits – psychopathy, narcissism, and Machiavellianism – among business students and professionals, including those entering finance. These studies often find that people attracted to high-power, high-reward fields can score higher on Dark Triad traits than average, raising concern about culture fit and ethical dispositions. In one U.S. study of senior executives across industries, about 3.5% met the clinical threshold for psychopathy on a diagnostic checklist [pmc.ncbi.nlm.nih.gov]. Australian research similarly estimated that between 3% and 21% of executives could exhibit strong psychopathic characteristics, depending on how inclusive the definition is [pmc.ncbi.nlm.nih.gov]. Such ranges reiterate that while not every finance leader is a psychopath, the minority that are may be relatively numerous and influential.
Importantly, the academic focus is not meant to sensationalise finance as a haven of psychopaths, but to identify destructive leadership patterns. Psychologist Nathan Brooks, Dr. Fritzon, and colleagues presented research at the Australian Psychological Society Congress highlighting that many companies have traditionally hired based on skills and results, “back-to-front,” instead of screening for character first [psychology.org.aupsychology.org.au]. They introduced the concept of assessing a candidate’s personality risk profile early in recruitment, noting that a character-first hiring approach might filter out high-risk personalities before they can do harm [psychology.org.au]. This perspective is gaining traction as part of a larger effort to prevent misconduct by addressing human factors, not just hard regulations.
Tools for Identifying Corporate Psychopathy
To support research and intervention, psychologists have developed specialised assessment tools aimed at the workplace. Traditional clinical measures of psychopathy – like the Hare Psychopathy Checklist-Revised (PCL-R) – were designed for forensic settings (e.g. prisons) and are not practical for routine corporate use [research.bond.edu.auresearch.bond.edu.au]. In response, tailored instruments have been created to detect “dark” personality traits among employees and leaders in a business context:
- Corporate Personality Inventory (CPI): The CPI is a self-report questionnaire specifically designed to flag problematic personality traits (including psychopathic characteristics) in workplace candidates [research.bond.edu.au]. A revised version (CPI-R) was developed by researchers Fritzon, Brooks, and colleagues around 2016 as part of their work on corporate psychopathy. This tool aims to be administered during recruitment or internal evaluations to identify individuals who score high on traits like insincerity, callousness, and egocentricity[psychology.org.au]. According to its developers, implementing such an inventory can help organisations “stop people sneaking through into positions” of power who could become very costly to the business [psychology.org.au].
- B-Scan 360: Sometimes called the Business Scan, this instrument was co-developed with input from Dr. Robert Hare. It is a 360-degree feedback survey, meaning it gathers observations from an individual’s coworkers and subordinates to gauge the person’s behaviours across several psychopathic dimensions. The B-Scan 360 focuses purely on psychopathic traits (e.g. manipulation, exploitativeness, lack of ethics) as observed in a workplace setting [research.bond.edu.au]. It helps overcome the issue of self-report bias by incorporating how others perceive the subject’s actions. Research by Mathieu et al. (2013) showed the B-Scan can reliably measure corporate psychopathy and has been used in studies linking psychopathic leadership to employee outcomes [sciencedirect.com].
- Other Assessment Tools: In addition to the above, there are broad personality assessments (like Hogan’s Development Survey or certain integrity tests) that, while not explicitly labeled for psychopathy, can indicate “dark side” traits. For example, the Hogan personality inventory has scales for boldness, mischievousness, and skepticism that correlate with narcissistic or manipulative tendencies [pmc.ncbi.nlm.nih.gov]. Some companies use multi-measure psychometric batteries during executive hiring – encompassing cognitive ability, emotional intelligence, and personality – which can indirectly screen out extreme cases. The Psychopathic Personality Inventory (PPI) and the Triarchic Psychopathy Measure (TriPM) are other instruments initially developed for research that have been adapted in experimental settings to evaluate corporate samples [research.bond.edu.auresearch.bond.edu.au].
The existence of these tools reflects a growing awareness that identifying high-risk personalities is important for corporate health. Indeed, a 2016 Australian study recommended that businesses conduct psychological screening for “successful psychopaths” as part of recruitment, given the high prevalence found in their sample [psychology.org.aupsychology.org.au]. Some financial institutions have reportedly even tried incorporating psychopathy assessments into their hiring processes in the past [themunicheye.com]. This is not yet common practice, partly due to ethical and legal considerations (e.g. how to use such test results fairly), but it signals that the industry is exploring more sophisticated vetting of character. Used properly, tools like the CPI or B-Scan could help HR departments and boards make more informed decisions, potentially weeding out candidates prone to harmful behavior before they ascend to leadership roles [psychology.org.au].
Regulatory and Industry Responses
Financial regulators are keenly interested in the conduct and integrity of industry leaders, though they typically stop short of prescribing specific psychological tests. In the UK, the Financial Conduct Authority (FCA) has tackled the issue of individual misconduct through frameworks that emphasize accountability and fitness. One major initiative is the Senior Managers and Certification Regime (SM&CR), introduced in the banking sector in 2016 and later extended across financial services. The SM&CR does not explicitly screen for psychopathy, but it aims to “increase individual accountability for senior staff” and to ensure that those in key roles are carefully vetted and held responsible for their decisions [fca.org.uk]. Under this regime, anyone appointed to a senior management function must be approved by regulators and judged “fit and proper” for the role – meaning they must have proven honesty, integrity, competence, and sound judgment [handbook.fca.org.uk]. Firms are required to conduct background checks and annually certify that certain employees (those in risk-sensitive roles) remain fit and proper. These steps, while not psychological evaluations per se, are intended to filter out individuals with histories of unethical or reckless behavior and to deter “bad apples” from exploiting lax oversight.
The FCA and other regulators have also put increasing focus on culture and conduct within firms. They encourage what the FCA calls a “speak up, listen up” culture, where employees at all levels feel psychologically safe to voice concerns about wrongdoing [fca.org.ukfca.org.uk]. This is relevant because one hallmark of a psychopathic manager is creating a climate of fear or silence, which allows their misconduct to go unchecked. By fostering openness and protecting whistleblowers, regulators hope that unethical practices can be spotted and stopped early, regardless of who is behind them. The FCA’s approach thus far relies on shaping corporate governance – for example, requiring clear statements of responsibility for senior managers, and enforcing conduct rules for all finance employees – rather than mandating direct personality testing. In practice, if a senior figure exhibits traits of a corporate psychopath (e.g. bullying staff, chronic dishonesty), the combination of cultural vigilance and the threat of regulatory action (including fines or bans) is meant to either reform that behavior or push the individual out.
It is worth noting that some experts have floated the idea of formal psychometric screening in high-stakes financial roles as a preventative measure. Psychometric evaluations are already routine in certain sectors (the military, for example, uses them to screen candidates for suitability), and there have been debates about requiring them for public office holders as well [pmc.ncbi.nlm.nih.gov]. Applying similar screening in finance could theoretically flag extreme narcissists or psychopaths before they do harm. Advocates argue this could be “cost-effective when weighed against the potential significant losses and dysfunction” caused by a corporate psychopath in power [pmc.ncbi.nlm.nih.gov]. In a 2016 paper, Boddy even proposed a “psychopathy screening” for public leadership positions, suggesting that identifying destructive personalities early is in the public interest [pmc.ncbi.nlm.nih.gov]. However, such proposals have not been adopted by regulators, likely due to practical and ethical hurdles. There is concern about false positives, privacy, and the stigma attached – as well as the lack of consensus on what threshold of traits should disqualify a person from leadership.
At present, regulators like the FCA focus on outcomes and behavior (e.g. enforcing accountability for misconduct) rather than psychological profiling.
Within firms, the onus is increasingly on boards and HR to ensure they appoint the right kind of leaders. Financial organisations have begun to integrate more rigorous reference checks, integrity tests, and even external personality assessments for senior hires – essentially voluntarily doing some level of screening. The Corporate Psychopaths Accountability literature suggests companies should combine multiple strategies: upfront testing, close monitoring of workplace hotspots (e.g. teams experiencing high turnover or complaints), and robust enforcement of codes of conduct [pmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.gov]. Used together, these can improve the odds of detecting and ousting a destructive leader before they cause irreversible damage [pmc.ncbi.nlm.nih.gov]. Regulators support such efforts indirectly by emphasising “tone from the top” and making clear that a firm’s leadership will be held accountable for cultural failings. In the UK, for example, the introduction of rules that allow the clawback of executives’ bonuses for misconduct, and the possibility of criminal charges for senior bankers who recklessly mismanage their bank, both serve as deterrents particularly salient to individuals who might otherwise feel above the rules.
Conclusion
Psychopathic traits – when present in the leadership of financial services firms – pose a unique challenge that straddles psychology, ethics, and regulation. The evidence is increasingly clear that a small but significant share of financial professionals exhibit psychopathic characteristics, at rates higher than found in the general public [psychology.org.authemunicheye.com]. These individuals can climb corporate ladders quickly, but their tenure often correlates with internal dysfunction, elevated misconduct risk, and even subpar business performance in the long run [themunicheye.comthemunicheye.com]. Academic studies and real-world cases alike warn that unchecked corporate psychopaths can wreak havoc – from fostering toxic workplaces to precipitating large-scale fraud or financial crises [pmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.gov].
Addressing this issue requires both insight and oversight. The development of tools like the Corporate Personality Inventory and B-Scan 360 shows promise in identifying high-risk personalities during hiring and appraisal processes [psychology.org.auresearch.bond.edu.au]. Meanwhile, regulators have strengthened frameworks for leadership accountability, aiming to trap any wolves of Wall Street in a net of transparency and responsibility even if they cannot be screened out in advance [fca.org.ukhandbook.fca.org.uk].
So far, bodies like the FCA stop short of formal psychological testing mandates, but they reinforce that fitness to serve in finance is as much about character as it is about credentials.
Going forward, the financial sector is challenged to balance the entrepreneurial and competitive drive it values with the ethical guardrails society demands. This might entail greater use of psychological insights – for example, training hiring managers to spot red flags, cultivating cultures where destructive behaviors don’t thrive, and perhaps one day integrating psychological evaluations for critical roles if consensus builds on their efficacy.
In the end, promoting integrity and emotional intelligence in finance benefits everyone: it curbs the outsized influence of those with psychopathic traits and fosters trust, stability, and accountability in an industry that profoundly affects the global economy [themunicheye.com].
Sources
- Australian Psychological Society – Media Release (2016). Corporate psychopaths common and can wreak havoc in business, researcher says. psychology.org.aupsychology.org.aupsychology.org.au
- The Munich Eye (2025). The Potential Threat of Psychopaths in the Financial Sector. themunicheye.comthemunicheye.comthemunicheye.comthemunicheye.com
- Holyoak & Nelson (2022). Corporate law and corporate psychopaths. Journal of Law and Financial Management, 21(1): Analysis linking psychopathic leadership to corporate collapsespmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.govpmc.ncbi.nlm.nih.gov.
- Bond University Research (Fritzon & Brooks, 2020). The assessment of psychopathic personality across settings. (In Corporate Psychopathy: Investigating Destructive Personalities in the Workplace). Discussion of corporate-focused tools like the B-Scan and CPI-Rresearch.bond.edu.au.
- Financial Conduct Authority – FCA Handbook, FIT 1.3. Fit and Proper Test for Employees and Senior Personnel. (Accessed 2025) handbook.fca.org.uk.
- Financial Conduct Authority (2019, updated 2023). Psychological Safety and Healthy Culture. (FCA official webpage on culture) fca.org.ukfca.org.uk.
- Financial Conduct Authority – Research Note (2018). Extending the Senior Managers & Certification Regime: CBA. Statement of SM&CR goalsfca.org.uk.
- Klarskov Jeppesen & Leder (2016). “Fraud and corporate psychopaths: reintroducing corporate character evaluation.” Journal of Forensic Accounting Research, 2(1): (Finding that 43% of auditors who identified a psychopathic manager saw fraud occur)sciencedirect.com.
- Boddy, C.R. (2016). “Psychopathy Screening for Public Leadership.” International Journal of Public Leadership, 12(4): 254–270. (Advocating consideration of psychometric screening in leadership)pmc.ncbi.nlm.nih.gov.
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