Can an Ethical Revival of Prudence Within Prudential Regulation Tackle Corporate Psychopathy?
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- Marshall, A., Baden, D. & Guidi, M. J Bus Ethics (2013) 117: 559. doi:10.1007/s10551-012-1547-4
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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.