Global Equity Strategy Abu Ghraib: Lessons from behavioural finance and for corporate governance
Prisons and corporate malfeasance
Milgram: The man that shocked the world
Abu Ghraib: Lessons from behavioural finance and for corporate governance
Conclusions
People have a bad habit of believing others act according to their disposition, whilst simultaneously believing we act according to our circumstances. It is tempting to believe that bad behaviour is the result of a few bad apples.
However, the bulk of evidence argues that in general, a situational perspective is much closer to the truth. That is to say, good people will go bad in the wrong situation. It isn’t a particularly comforting view of humanity.
From a corporate governance point of view, the situational perspective tells us that we must always be on our guard for situations that could give rise to bad behaviour. The men now standing trial for misbehaviour during the bubble years are unlikely to be the last corporate wrong doers.
By Dr James Montier
Global Equity Strategy Abu Ghraib: Lessons from behavioural finance and for corporate governance
Bad apples or bad barrels? It is tempting to believe bad behaviour is the result of a few rotten individuals. However, the overwhelming psychological evidence suggests that if you put good people into bad situations they usually turn bad. Corporate malfeasance and the events in Iraqi prisons are examined and the lessons explored.
By Dr James Montier