Why Do Corporate Executives Misbehave?
So why do these high flying corporate executives misbehave? These people are financially rich. They are worth tens of millions of dollar, so why do they risk their reputation, freedom and wealth for more money? Of course people would shout out greed! But that isn’t the complete answer. Economist Adam Smith had argued that the free market had natural checks and balances that would constrain greed, selfishness and fraud; that concern for reputation and the loss of commercial potential would limit fraud and negligence. Add some more obvious fears – jail and social ostracism – and the system generally works as Smith envisaged. But the exceptions are glaring and disquieting. Over the past years the public has seen executives go down in history. There was the case of the CEO with an unblemished record who is sacked after cartel behaviour is uncovered within Amcor who was under pressue, or how about the amoral behaviour of James Hardie. Or is it simply the instinctive, insatiable greed of Adl
