Lack of investor confidence in the stewards of large corporations decreases the investment rate, which raises the cost of borrowing, decreases economic activity, and prolongs the depressed nature. If this situation is to change, then the underlying condition should change.
One way to restore the reputation of all publically-traded corporations is to enact a law that forces all company board of directors members, board of directors chairmen, and company presidents to take the psycopath test, and fail it.
This isn't some cosmetic accounting law like Sabane's Oxley. Many deviant corporate players simply created accounting loops around the rules to keep theft off the books. There is no accounting rule that can't be twisted.
On the other hand, if you prevent psychopaths from reaching the management levels, then there are less risky people in charge of everyone else's resources.
The psychopath test, known as the Hare Test, or the Hare Psychopathy Checklist is a carefully created test to spot those with psychopathic tendencies. It is not an absolute determinant. If a person can act psycopathic, then there is a risk of behavior that will jeopardize shareholder value.
Seems like a wildly unfair, anti-democratic law? Here is what the Hare test screens for:
Factor 1: Interpersonal/Affective
- Glibness/superficial charm
- Grandiose sense of self-worth
- Pathological lying
- Cunning/manipulative
- Lack of remorse or guilt
- Shallow affect (genuine emotion is short-lived and egocentric)
- Callousness; lack of empathy
- Failure to accept responsibility for his or her own actions
- Need for stimulation/proneness to boredom
- Parasitic lifestyle
- Poor behavioral control
- Lack of realistic long-term goals
- Impulsiveness
- Irresponsibility
- Juvenile delinquency
- Early behavior problems
- Revocation of conditional release
- Criminal versatility
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