How to identify a psychopathic manager

How to identify a gefhrlicher irreric managerHow to identify a psychopathic managerPopularized by movies about morally bankrupt men on Wall Street, the myth of the psychopathic stockbroker who is able to succeed financially despite his character flaws has gone mainstream. Yes, they think greed is good. Yes, these power-hungry bullies are not role models for society. But, hey, at least theyre charming, persuasive risk-takers and good with numbers, the thinking goes.Contrary to those stereotypes, a new paper inPersonality and Social Psychology Bulletin found that hedge fund managers who showed psychopathic tendencies were actually worse investors for their clients. In the study, researchers characterized psychopathy as people who lack empathy and are impulsive and aggressive.How to identify a psychopathic managerBut how could the researchers identify who was a psychopathic force of manipulation and deception? Apparently, our body language gives us away. Instead of asking managers strai ght-up about their psychopathic tendencies, the researchers relied on coders rating nonverbal and verbal behaviors of hedge fund managers in semistructured video interviews. The study was building upon previous research that found emotional disturbances in peoples facial expression and language can expose peoples characters.Under this research, Machiavellian types use behavioral signals like expansive posture to display dominance. Narcissists make conversations all about them and use I over we. And psychopaths are prone to erratic emotional expression and will smile and take pleasure at the failures of othersIn total, the researchers identified the psychopathic, Machiavellian, and narcissistic tendencies - the so-calledDark Triad traits - in 101 hedge fund managers. Then, researchers looked to see if that affected their financial performance in 2005-2015, a 10-year period of particular economic volatility.The psychopath effectWhile Machiavellianism had no effect on financial perfo rmance, psychopathic tendencies did. Those who showed psychopathic personality traits had annualized returns of nearly 1% less than managers rated at the mean of psychopathy. The more psychopathic you were, the worse your investment return got. Extreme psychopaths, with behaviors two deviations above average, could lose money in the six-digit range. The researchers found that when an extreme psychopath invested $1 million, that investment earned $311,834 less than a manager who showed average levels of psychopathic tendencies.So why does the myth of the psychopathic stock genius endure? Researchers suggest that theyre good at getting power quickly and rising up the ranks. Psychopathic behaviors may be associated with perceptions of dominance or competence, which lead to rapid promotions in some organizations, the study states. Once in a position of power, however, psychopathic behaviors may prove counterproductive.Sooner or later, as in the third act of many of these Wall Street mov ies, the psychopath within gets revealed for all to see.