Ian Reppel

• • 6 min

What They Definitely Don't Teach You in Business School

Leadership courses celebrate vision, empowerment, and charisma. Yet history, psychology, and neuroscience paint a far less flattering picture. Power seduces, corrupts, and destroys.

This is a guide to the darkest habits of power in business, drawn from psychology studies, brain scans, and transcripts from criminal courts. If you think that is all very irrelevant, think again.

Power attracts liars, schemers, and manipulators

Meta-analyses show narcissists, psychopaths, and Machiavellians (a.k.a. dark-triad personalities) are more likely to become leaders, even though they tend to perform worse and cause more damage. Narcissists rise through the ranks quickly, while Machiavellians at the helm can provide financial benefits to firms. Overall, people from the dark triad are more focussed on short-term personal gains than long-term success, though.

What traits do we observe in leaders with these pathologies?

  • Psychopaths: impulsive, remorseless, callous, cynical, yet superficially charming and calm under pressure.
  • Narcissists: grandiose, self-absorbed, indifferent, entitled, sensitive to criticism, yet highly visible, confident, and persuasive.
  • Machiavellians: manipulative, exploitative, domineering, yet skilled at impression management and building alliances.

When it comes to bullshit vs lies, psychopaths are more prone to lying, while narcissists rely mostly on bullshit. Machiavellians can employ both techniques, though impression management fits better within the bullshit camp.

Based on clinical experience rather than epidemiological studies, 3–4% of executives meet the threshold for psychopathy, three times the population average. The same is true for narcissists and Machiavellians. Psychopaths are already more prevalent among business students, so there is clearly a self-selection bias: power attracts those who wish to wield and perhaps abuse it for their own gains.

Among CEOs, psychopathy is observable in 12% to 21%. Approximately 18% score high on narcissism, which leads these people to hire more executives with similar traits. It is crucial to realize that these are personality disorders, not qualifications for executive positions. In fact, these particular disorders may lead to dramatic and erratic behaviour, such as impulsiveness, theatricality, promiscuity, or breaking the law.

Psychopaths, as Joseph Abraham argues in Kings, Conquerors, Psychopaths: from Alexander to Hitler to the Corporation, seize power in five stages:

  1. Charm and generosity mixed with a grand vision attract followers while psychopaths still consolidate power.
  2. Divide and conquer by rewarding insiders and demonizing outsiders.
  3. Remove regulation and control the flow of information.
  4. Rule by fear once dominance is secure.
  5. Rewrite history through myth making to whitewash their atrocities.

In the boardroom, this translates to hiring loyalists, silencing whistleblowers and researchers who dare oppose their plans with studies that show off harms to society (e.g. tobacco, oil, sugar, and opioids), mass layoffs to intimidate the workforce, ESG rebranding and selective corporate social responsibility campaigns, tax evasion masqueraded as philanthropy, authorized biographies, and so on. The end-justifies-the-means thinking is common in all three personality types of the dark triad.

Most people obey, even when it feels wrong

70% of adults in modern Milgram replications still follow immoral orders when issued by an authority. That is down from 79% in the original studies where people were asked to shock participants who acted out pain, but still very high. The Stanford prison experiment also demonstrated that ordinary citizens can become cruel and dehumanize their fellow humans within moments after having been handed power. Similarly, the BBC prison study found that tyranny emerges when groups internalize leadership norms and shared goals, not when roles are assigned.

In the classic Eichmann in Jerusalem, Hannah Arendt calls it the “banality of evil”: atrocities happen because of conformity, not sadism. People follow unscrupulous leaders, not because they are inherently immoral, but because they are asked and believe they have no choice. Or as Elodie Lancefield (Carole Weyers) in the TV series Manhattan aptly says:

Just because there may be a consequence doesn’t mean you have no choice. Manhattan: “The Understudy” (2014)

People almost always have a choice. Most just choose the path of least resistance. Quite literally.

Just following orders rewires the brain

In Just Following Orders, neuroscientist Emilie Caspar writes that coercion reduces a person’s sense of agency, empathy activation, and guilt response. When people comply with orders they do not accept responsibility for the consequences of their own actions; our brains relax our aversion to harming others. It is not dissimilar to bystanders who look on but do nothing to help a victim, because their own responsibility feels limited.

Hierarchy reduces agency and feelings of responsibility. People who are trained to follow orders even process their own free decisions as if they had been ordered. Caspar also observes that people may turn more antisocial if they are confident they can get away with their behaviour.

Most importantly, resisting immoral orders requires extra cognitive effort. In other words, bravery is metabolically expensive.

Hypocrites without empathy

Power turns people into hypocrites: they call out other people’s misdeeds while they themselves cheat even more. It also reduces their ability to read emotions accurately. When combined with accountability and deliberate perspective-taking, power can actually improve fairness. Unfortunately, dark-triad personalities exploit any accountability vacuum—or weak governance—to bend that power towards self-interest. For people in positions of power, this either means that they ignore other people’s points of view when making decisions or they misread them.

Corruption is common

While the public is generally aware of high-profile fraud cases among executives (e.g. Bernie Madoff, Jeffrey Skilling (Enron), Elizabeth Holmes (Theranos), Markus Braun (Wirecard), Sam Bankman-Fried (FTX)), it may come as a surprise that certain types of executives are even responsible for human rights abuses. Perhaps people remember the Nuremburg trials, at which 13 executives from IG Farben, 10 from Krupp, and 3 from Flick were found guilty of crimes against humanity, though that let many off the hook, such as managers from AEG, Bayer, BMW, Daimler, Ford, GM, Hugo Boss, IBM, Siemens, Volkswagen, Zeiss, to name but a few that are still in business. Or even Sigmund Rasher who performed experiments on concentration camp prisoners for cosmetics company Weleda.

Human rights abuses sanctioned or even ordered by executives still happen:

With corporations’ limited liability, immoral executives can often hide behind legal entities and complex subsidiaries or contractors that mask the paper trail without facing consequences personally. Paying terrorists for market access or algorithmic arson that fuels civil wars is calculated malice, executed by leaders who treat atrocities as mere cells in spreadsheets.

Tattletales

Don’t leaders report on the misconduct of one another?

Gallup found that only 39% of non-managers report misconduct, whereas 55% in management do so. They conclude that “managers who model ethical behaviour and appropriately address unethical behaviour set the tone and clarify standards for the team.” Good, right?

Unfortunately, the higher-ups perceive immoral behaviour by their peers as less problematic, because they do not wish to speak up against one of their own. Yes, leaders do report misconduct more often, but mostly about their subordinates, not their peers. Since the cost of fraud is seven times higher when committed by an executive, a lot of high-impact misconduct therefore goes unreported.

Powerful individuals adopt ethics based on external pressures, not intrinsic values. Occasional dishonesty also has a tendency to turn into ingrained immoral behaviour. Because of that, we must call out their transgressions and hold each person in power accountable.

What can we do?

The best way to protect organizations and society is to build systems that are resilient to problematic personalities: expect abuse from those in power, so we can prevent it systematically. For instance, we can:

Burn the playbook

Here’s what business schools rarely teach about power:

  1. Power attracts people who wish to abuse it.
  2. Obedience is a neurological default.
  3. Unethical behaviour is predictable without oversight and enforcement.
  4. Ethical leadership is a systems engineering problem, not a personality test.

From IG Farben to Meta, the playbook hasn’t changed, just the logos.

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