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The Irrational Actor In The Ceo Suite: Implications For Corporate Governance, Renee M. Jones

Renee Jones

This Article challenges corporate governance theorists’ standard assumptions regarding the rationality of business leaders. It reviews scholarly research that documents the presence of irrational actors among senior corporate managers and considers the impact these executives might have on corporations and society. The Article focuses analysis on psychological literature that explores why risk-related decision-making often goes wrong.

Research shows that many individuals have a dysfunctional approach to risk that leads them to engage in self-destructive conduct. A non-trivial number of individuals with problematic personality traits work at high levels of major corporations where they have the capacity to cause significant harm. …