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A.B.C.'s of Behavioral Forensics: Applying Psychology to Financial Fraud Prevention and Detection by Kelly R. Pope, Joseph W. Koletar, David E. Morrison, III, Sridhar Ramamoorti

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CHAPTER 7

The Bad Bushel and Beyond

SEEING THE LARGER CONTEXT OF THE C-SUITE

In Chapter 6, we discussed how the challenges of midlife for senior executives may contribute to the potential rationalizations of those who commit fraud. Personal expectations about what a career will provide and one's perceived sense of value to an organization can lie at the core of the motivation to commit fraud. The emotional, and specifically the shame-driven, motivations to take control and earn a lot of money can cause senior executives to take what is not rightfully theirs but what feels like it.

As an individual moves higher in the organization, his or her relative influence grows. And as it does, so does the relative risk of significant losses—or, in financial terms, the financial materiality. Studies and programs have been designed to address tone at the top. Many headline-grabbing stories of significant financial losses consistently illustrate that the challenges of stopping illegal behavior in the C-suite were not met.1

Senior executives are just like the rest of us, aren't they? Not quite! This chapter outlines what is known about senior executives from an organizational psychiatry perspective. This understanding is then contrasted with what is known from the allied field of organizational behavior in order to explain why things go wrong in the boardroom and the C-suite.

Luck and Effort Distinguish Senior Executives

For senior executives in whose health and well-being the company has a ...

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