Application of the critical-path method to evaluate insider risks. (2015)

What practical steps can firms take to manage the “risk of blinding over-confidence”?

Eric Shaw, operational psychologist and researcher specializing in insider risk issues; and Laura Sellers, Clinical Social Worker and former counter intelligence analyst with the US Department of Defense.
Studies in Intelligence Vol 59, No. 2 (Extracts, June 2015)

“To credit risk, market risk, liquidity risk, conduct risk in its several forms, firms need to add hubris risk,” commented a top UK regulator recently. (See story).

What practical steps can firms take to manage this “risk of blinding over-confidence”?

The authors of this article propose a critical-path method of evaluating insider risks. While their work is set in an intelligence / national security context, it could well be applied to organizations which face disastrous consequences from ‘rogue behavior’ at the top

The authors “draw on the most recent and compre­hensive empirical studies of insider hostile acts … to demon­strate that there exists a common set of factors and a similar pattern of individual and organizational be­havior across the many occurrences during recent years.

They consider in turn Personal Predispositions, Stressors, Concerning Behaviours and Problematic Organizational Responses.

Discussing Concerning Behaviors they note that “Many inside offenders had prob­lems following rules, or preferred social isolation to being part of a group. Their behaviors ranged from extreme shyness and avoidance of others to bullying, exploitation, and manipulation of peers. Personality disorders are systematic biases in the ways in which individuals select and process information that helps them see themselves and others in the world. Narcissistic, psychopathic, and avoidant personality characteris­tics have been cited as prominent in espionage cases”

Access a PDF of the article here: Shaw-Critical Path-June-2015