by ALEX P. Vidal
LAGUNA BEACH, California –In an exclusive interview with Dr. Robert Hoyk, a Psychologist and author of a book that looks at the root causes of unethical behavior and describes psychological traps that the unwitting executive can fall prey to, is launched before recession walloped the western world, particularly the United States of America.
It is where the most gigantic financial catastrophe in recent memory romped off that led to the fall in disgrace of some of the biggest names in the US corporate world.
Dr. Robert Hoyk, is a clinical psychologist and primary author of "The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior: 45 Psychological Traps that Every One of Us Falls Prey To" (Stanford University Press; ISBN: 978-0804759656, hardcover). Hoyk analyzes treacherous situations from Enron to Jonestown and personal scenarios throughout "The Ethical Executive." He is a remarkable source to help others understand the "Why" of these dilemmas and any new ones that are likely to present themselves.
The "Ethical Executive" will help us become aware of these traps - so we can be more cautious, vigilant and then hopefully avoid them. Here’s our exclusive interview with the great author:
Alex P. Vidal (APV): The Ethical Executive rolled off the press in 2008, a year before Bernard Madoff’s Wall Street caper was uncovered in what could be the most horrific financial rip off of epic proportion in American history. While you and Dr. Hersey were collaborating to come up with this book, Madoff was already wrecking havoc on the financial institution. Was the conceptualization of The Ethical Executive a mere coincidence or a case of serendipity?
DR. HOYK: A coincidence on the surface, though it was no coincidence that many of the factors we examined happened to Madoff. In that sense, Madoff is one example of exactly what our book predicts.
Madoff provided investment services for individuals and institutions. In December of 2008, the Securities and Exchange Commission (USA) indicted Madoff with securities fraud. It was alleged that he was using an immense Ponzi scheme. He had paid out "returns" from money sent to him by new investors for years.
APV: Which of the 45 Psychological Traps you warned readers not to fall prey to Bernard Madoff and his cohorts?
DR. HOYK: Madoff became ensnared in two traps.
Obligation Trap. Throughout history, moral justification has been used to sanction acts of evil. Torture and murder have been committed for the sake of protecting one’s family or honor, purifying the race, safeguarding a way of life, serving God, and many more. For example, in Rwanda in 1994, under the justification of "Hutu Power," approximately seventy thousand Tutsis were brutally killed.
Obligation is a particular type of justification. The dictionary defines "obligation" as fulfilling a promise or commitment. Unethical behavior is readily given a moral connotation with the use of obligation: "I needed to keep my commitment, to do what I promised. My word is who I am."
When Madoff pleaded guilty in court, he delivered a short account of his motivation for breaking the law. The fraud began during a recession when institutions were becoming new clients. Madoff felt obligated to take on these institutions. The Ponzi scheme started because of a need to fulfill a commitment. Madoff stated, "I felt compelled to satisfy my clients’ expectations, at any cost."
Addiction Trap. Regarding his Ponzi scheme, Madoff stated in court that "once he started, he could not stop." Like a heroin addict he kept coming back for more.
Why do people become addicted? Early in my career, I was employed in an outpatient clinic for drug addiction. One client in my weekly group, Jim, would rarely say anything. One evening he came up to me when everyone had left and said, "I get very anxious speaking in front of others—I’m really shy. But you know, when I shoot up, I love myself. I’m so confident. When I’m high, I can sit down on a public bench and lead a conversation with a total stranger for an hour—I love who I am." Jim’s problem of chronic shyness disappeared when he used drugs. The dramatic, short-term benefits kept him coming back for more.
The benefits that Madoff received—status, security, a large salary, a profitable company—also kept him addicted to the Ponzi scheme.
APV: Could the Madoff catastrophe have been avoided or prevented?
DR. HOYK: If our book had come out earlier and Madoff had used it to establish an ethical culture in his business, the Ponzi scheme might have been prevented. Our book would have to be backed by concrete policy and ideally one of the Ethics Officers would be a psychologist who would help Madoff work through his cravings and need for justification.
APV: As precautionary measure, is there a need to make Personal Assessment Inventory mandatory for every executive in the corporate world before they are entrusted of gargantuan responsibilities such as managing financial affairs?
DR. HOYK: In our book we describe three types of Traps: Primary, Defensive and Personality. Personality Traps are various traits that can make us more vulnerable to wrongdoing. It is important that executives get assessed to be aware of any traits they might have that could make them particularly vulnerable.
APV: Which factor do you attribute the United States’ present economic disarray? Is it possible that some of the country’s economic managers may have been bedeviled by psychological traps?
DR. HOYK: Our present economic crisis is mostly caused by economic factors. Many of the Traps we describe in our book made the crisis more severe, for example Trap 4, Faceless Victims; Trap 12, Conformity; Trap 7, Tyranny of Goals; and Trap 8, Money.
APV: How did you arrive at 45 as the number of psycho-logical traps that every one of us falls prey to?
DR. HOYK: I kept researching, thinking and writing until the book was finished. When I added up the number of Traps, they totaled 45. We believe there are more Traps to discover.
APV: Could you tell us more about the HealthSpan International Foundation, which is the beneficiary of fifteen percent of the proceeds from the sales of your book? DR. HOYK: HealthSpan was founded by a friend of mine, Jim Katzenstein. Its mission is to improve healthcare in developing countries.
APV: What is an ethical executive?
DR. HOYK: An ethical executive is an executive who is knowledgeable about the 45 Traps described in our book. They use their knowledge to create policy within their organization to establish an ethical culture.
‘Hungry’ Pacquiao
Only a knockout victory against Sugar Shane Mosley can satisfy die hard Manny Pacquiao fans. The Filipino welterweight champion admitted after flying back to the United States April 3. He revealed he is still "hungry" despite clinching world titles in eight divisions.
Despite a six-year winning streak, the 32-year-old congressman cum fighter from Mindanao said he still hankers for more world titles and victories in mega fights.
He and his coaching staff spent three weeks in his Baguio City training camp. Pacquiao will wrap up his training at the Wild Card gym in Hollywood, California before motoring to Las Vegas to face 39-year-old Mosley for WBO welterweight tiara at the MGM Grand. /MP
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