Corporate Governance and
Narcissistic Behaviour
The Role of Virtue
Presented at 3rd Biennial International
Conference in Business, Banking and Finance
May 27 – 29, 2009
U.W.I, St. Augustine
Surendra Arjoon
Department of Management Studies
U.W.I St. Augustine
The Evolution of Gollum
The Continuum of Compromise
Stages
Acts of Omission
Attitudes
The Virtuous
Acts of Administrative
Commission
Acts of Criminal Commission
The OUB
The Egoist
Corporate Governance
Weaknesses
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Safeguards against excessive risktaking
Standards insufficient
Compensation
Corporate Governance
Causes of Failure
Rotten Core
“ The very capitalism that built America into
the super-power that is being questioned
and politicians are finding it hard to
swallow that the solution may lie in a
socialistic framework”
Ram Ramesh
Trinidad Express
March 15th 2009
Rotten Core
“I’m not sure if it’s good to have freedom
or not. I’m gradually beginning to feel that
we Chinese need to be controlled. If we’re
not being controlled, we’ll do what we
want to….freedoms in Hong Kong and
Taiwan made these societies chaotic”
Jackie Chan
Associated Press
April 20, 2009
Rotten Apples
“While institutions are larger than men it
is still men who inhabit them. And if our
institutions are now degenerating through
lack of integrity and trustworthiness, it is
ultimately the men and women entrusted
with the task of maintaining and building
such institutions have themselves
operated without integrity and
trustworthiness”
Michael Harris
Trinidad Express
March 6th
Rotten Apples
“The US financial crisis was not caused by
the complex instruments, but by the
failure of leaders on Wall Street. The
heads of firms like Bear Sterns, Lehman
Brothers, AIG, Countrywide, Financial, and
Washington Mutual all too often sacrificed
their firms’ futures in order to maximize
personal gains”
Bill George
Business Week
Narcissistic Behaviour
Characteristics
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Extravagant sense of self-importance
Egotistical
Exaggerate talents and ability
Desire for power, attention, and admiration
Likely to emerge as leaders
Boastful and pretentious behaviour
Grandiose fantasies of unlimited success
Unreasonable sense of entitlement and
superiority
Narcissistic Behaviour
Manifestations
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Denials and rationalizations to justify
behaviour
Willingness to exploit others
Vulnerable and fluctuating selfesteem
Lack of empathy
Charming and extraverted
Believes that others envy him or her
Envious of others
Narcissistic Behaviour
Manifestations

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Likely to emerge as leaders
Vulnerable and fluctuating selfesteem
Strong reactions to perceived
challenges or threats
Fluctuating or impaired emphatic
ability
Perfectionist ideals and standards
Economic Fallacy
Natural Resources + Labour =
Productivity
The Role of Virtue
“….to support that any form of
government will secure liberty or
happiness without any virtue in the
people is a chimerical idea”
James Madison
The Role of Virtue
“The common good of the State
cannot flourish unless the citizens be
virtuous, at least those whose
business it is to govern”
Thomas Aquinas
Types of Business People
“The difference between the
temporarily successful business
persons and those who became and
remain successful is the latter
possess virtuous characters”
Key Components of Virtuous
Behavior

Judgment
• Think before acting and consider the
consequences of actions
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Fairness
• Honesty:
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saying what is true
open and transparent communication
• Respect:
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treating people with dignity and valuing their
contributions
maintaining fairness in all relationships
Mental toughness
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speaking up for what is right and reporting
wrongdoings
Key Components Virtuous
Behavior

Self-mastery
• Trust:

keeping commitments
• Integrity:
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doing the right things without compromise
avoiding the appearance of impropriety
• Responsibility:
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accepting the consequences of actions
admitting mistakes and correcting them quickly
not retaliating against those who report violations of
law or policy