Science can help to spot symptoms of executive hubris. (Financial Times, 2013)

Tett, Gillian. “How can an investor tell if a bank is heading for danger? Analysts have proposed all manner of financial measures. But why not analyse the words of the person running the bank?

Gillian Tett

Financial Times, 23 September 2013

How can an investor tell if a bank is heading for danger? In the past five years, analysts have proposed all manner of financial measures. But why not analyse the words of the person running the bank? Researchers have been looking at the speech patterns of leaders such as British politicians and bank chief executives. And this has revealed a point that we instinctively know but often forget: power not only goes to the head, but also to the tongue.

More specifically, when leaders become hubristic, it generates what psychologists call “linguistic biomarkers”.

Peter Garrard, a neurology professor at St George’s, University of London …. assembled a group to analyse all the words uttered by the three British prime ministers who served from 1979 to 2007 – Thatcher, Mr Blair and Mr Major – during their questioning by British MPs in their regular parliamentary grillings.

The number of “linguistic biomarkers” associated with hubris was highest for Mr Blair, followed by Thatcher – with Mr Major a long way behind.

Prof Garrard’s team now plan to use this approach to analyse the language of chief executives, too, echoing analysis already done by American psychologists into narcissism among corporate leaders. But in the meantime, another intriguing study has also recently emerged from University College Dublin.

Niamh Brennan and John Conroy, a professor and a graduate student, analysed the letters to shareholders issued by the chief executive of a European bank that expanded very dramatically during the boom and then suffered massive losses. Their analysis showed that during the eight years that he was in power, this chief executive also displayed rising hubris in his speech, with excessive optimism and a growing use of the royal “we”.

Access the full article here: Science can help to spot symptoms of executive hubris.

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