The numbers are remarkable at first glance. According to studies, depending on the diagnostic criteria, 0.5 to 1% of the population have narcissistic personality traits. Behavioural researchers estimate the proportion of people with psychopathic characteristics to be between 1.5 and 3.5%. For Germany, with its approximately 84 million inhabitants, this means that up to around 3 million people have antisocial personalities. According to scientists, the proportion of such people among managers is above average. Narcissists make up 3% of executives, and psychopaths, according to Canadian criminal psychologist Robert D. Hare, makeup 3% to 6%.

If you calculate this across the 160 companies in the DAX family (DAX, MDAX, SDAX), each with an average of four people at the top management level, then – purely statistically speaking – there are around 19 to 38 people with a personality disorder among the total of around 640 board members of top German companies listed on the stock exchange.

Dealing with people with disturbed personalities is a topic of growing importance. It is now reportedly common practice in large European companies for psychologists to coach newly hired managers in responsible positions during a probationary period. The trend from the USA is spreading in Europe. Companies are interested in knowing that the new managers are predictable in their behaviour. However, Mittelstand companies can often not afford the additional expense.

According to psychologists, people with personality disorders are relatively common among managers because the educational, performance and income elite in society „attract“ people with narcissistic and psychopathic behaviour. Academics with exaggerated self-esteem and a need for recognition (narcissism), as well as unpredictable, impulsive behaviour (psychopathy), are in fact, unable to work in teams or lead teams because. Due to their self-centeredness, egocentrism and lack of empathy, they tend to put their interests first in a group, a psychologist who does not wish to be named told Börsen-Zeitung in an interview. This risks damage to companies that strive for the ideal of a team with superiors who lead the employees under their supervision – though on an equal footing.

People who already have these two character traits and who also consciously „covertly“ manipulate other people on the basis of a high position of power (Machiavellianism) in order to achieve their own goals resemble a behaviour pattern that psychologists call the „dark triad“. That is when narcissism, psychopathy and Machiavellianism come together.

Unlike managers in companies, this „dark triad“ is more evident in politicians. Examples of this are Vladimir Putin and Donald Trump. Psychologists also share this view. The problem, however, is that their assessment is also based only on remote diagnosis; this assumption cannot be proven on the basis of a diagnosis. In all probability, there will never be any evidence for this because it is hard to imagine that the Russian autocrat and the former US president would „voluntarily“ undergo a psychological examination that could prove this assumption on the basis of regular conversations. In any case, both would contradict the assertion that they are the way others perceive them. They probably have a completely different self-image, that differs radically from that of the public.

The latter is a crucial aspect. In everyday life and, therefore also in working life, personality disorders are not immediately recognisable from the outside. It can take years before something like this is diagnosed in managers with behavioural problems. But this requires the willingness of the affected person to really open up to others. Since many do not do this out of shame and status consciousness, these disorders remain „undiscovered“ throughout their lives after colleagues, outraged by narcissists and psychopaths in the company, have long since resigned – without giving any further details about the reasons – and moved to other organisations.

Anyone who believes that the „dark triad“ is a necessary or even sufficient condition for a manager with a personality disorder to drift into criminality is wrong. Many to whom the triad could apply do not violate laws because, within the framework of the given social norms and the legal system, they have learned to live socially inconspicuously despite their complex personalities, as Benjamin Schorn explains in his 2022 book „Greed, Power, Shame? Motives of Criminal Managers Psychologically Explained“. Control mechanisms (including supervisory boards, compliance rules and auditors) also form hurdles to deliberately violating the rules of the game. Suppose these people at the rank of manager nevertheless become criminals. In that case, those around them are surprised because they would not have thought these people capable of doing so precisely because of their inconspicuousness, says Schorn.

According to Schorn, some offender profiles in white-collar crimes showed „pronounced tendencies towards narcissistic-self-centered personality traits“, but comprehensive studies have shown that this group of people makes up just 17% of convicted white-collar criminals. He refers to research results from economics professor Thomas Cleff and colleagues. „The percentage of narcissists in the sense of a narcissistic personality disorder among managers who commit white-collar crimes remains uncertain,“ Schorn concludes.

As the American psychologist Stanley Milgram demonstrated in experiments in 1961, average people also have the potential to become criminals by following authoritarian instructions even though they contradict norms. Subjects were tricked into giving others painful electric shocks if they did not perform specific tasks (punishment), even though the subjects knew that this method of torture could lead to death.

The sobering result of the experiment made it clear that almost everyone is capable of transgressive behaviour. Fortunately, it never comes to light – or if it does, then only very rarely. Referring to a personality disorder as the cause of white-collar crimes would, therefore be too one-dimensional. The motives of perpetrators are more complex.

Criminologists, psychologists, psychiatrists and forensic scientists in auditing firms are investigating the conditions under which managers come into conflict with the law. Schorn names greed, personal gain, feelings of superiority, fraudulent agreements with others and opportunity as the main motives for white-collar criminals. The author has experience in this field as a forensic scientist at KPMG. According to him, external influences are decisive.

For example, a prominent position of power combined with a corporate culture focused on one or a few managers can encourage deliberate fraudulent behaviour. Keywords for this are a personality cult around a CEO, the feeling of the CEO's unlimited arbitrary power and a culture of fear in a company. This goes so far that managers at the middle level of the hierarchy are prepared to act even though these actions contradict their own norms, with the aim of gaining recognition and attention. Psychologists call such people „functional narcissists“.

According to the psychologist mentioned above, Markus Braun, the ex-CEO of the payment processing company Wirecard, which collapsed in 2020, whose so-called third-party partner business in Asia with trust accounts totaling 1.9 billion euros turned out to be a pipe dream, is a „visionary narcissist“ type. The damage to investors amounts to 3.2 billion euros. Braun has been on trial since December 2022. The main defendant denies having committed the crimes. The court is not investigating the question of whether he might have a personality disorder. This means that behavioural researchers only have the option of remote diagnosis in Braun's case. Experts refer to visionary narcissists as people who, in a self-aggrandising way, tend to think in big dimensions and make outward predictions for the future that resemble megalomania.

Even in cases of uncovered fraudulent pyramid schemes such as that of the sports flooring manufacturer Balsam AG (1994), the horizontal drilling machine for pipeline laying company Flowtex (1999) and the US wealth manager Bernie Madoff (2008), it is not possible to say with certainty afterwards whether a personality disorder was the cause of criminal acts. In any case, the personality structure of the convicted perpetrators was not the main explanation for their misconduct in the criminal trials.

This is because the personality structure of suspects plays a marginal role for the judiciary in establishing the truth in matters of white-collar crime. Prosecutors must rightly assume that the managers who have to answer in court are culpable – regardless of whether they are relatively „normal“ or show signs of a personality disorder. People with severe schizophrenic disorders or dementia sufferers are not considered culpable.

The latest development in the Wirecard criminal trial was remarkable in this context. The lawyers of the co-defendant, former chief accountant Stephan von Erffa, defended their client by requesting that he be classified as not criminally responsible due to his personal weaknesses (easily manipulated). They tried to get a lenient sentence for their client in this way. However, the two experts appointed by the criminal court determined in their diagnosis that Erffa had some conspicuous personality traits, but was nonetheless was largely normal. The strategy of the legal advisors thus failed.

This shows that the concept of normality is extremely flexible in behavioural research and case law. If this were not the case, managers who demonstrably harbour the „dark triad“ could be classified as not criminally responsible because their behaviour is extremely abnormal. But that would contradict the principle of equality for all before the law, especially since psychologists say that narcissists and psychopaths are „difficult to treat“.