Kelsey Dworkis, assistant professor of accountancy, has long focused her research on narcissism in business leaders and how accountants deal with it. That area of study has become even more compelling because narcissism in young people has risen, expanding the narcissism that already exists in the corporate world.
“It’s important from an accounting standpoint to know that 40 percent of the work force are millennials, and they’re climbing into the C-Suite with a higher percentage of narcissism,” Dworkis said.
Dworkis and other researchers have found that business executives with varying degrees of narcissism — who can be self-absorbed, exploitative of others and vain, among other things — can impede company performance. But accountants can help counter unproductive narcissistic behavior by designing control systems that motivate narcissists to help their companies more.
Assistant Professor Dworkis discussed those controls, and narcissism in business generally, at a town hall called “It’s All about All of Us: The Rise of Global Narcissism in the Work Place.” Held the evening of Mon., Oct. 9, at Margery Reed Hall, the event was sponsored by the Daniels College of Business School of Accountancy and Chicago-based nonpartisan nonprofit Truth in Accounting. The Illinois group educates the public, officials and the press about transparency in government finance.
Truth in Accounting CEO Sheila Weinberg, who got a bachelor’s degree in accounting from DU and sits on the Daniels School of Accountancy Advisory Board, introduced Dworkis. “I first saw Kelsey when she spoke to the advisory board, and we thought what she had to say was interesting,” Weinberg said.
The increase in narcissism among young people has been quantified in research including a 2008 study by a team headed by psychologist Jean Twenge at San Diego State University. Twenge found that narcissistic tendencies in college sophomores taking the Narcissistic Personality Inventory (NPI) test from 1980-2006 rose from one in seven students at the study’s start to nearly twice that number — one in four students — at the end. Dworkis and other researchers believe that a major way accountants can work with narcissistic business leaders is through incentives including compensation.
“A large percentage of CEOs have narcissistic tendencies, so the challenge for accountants is how to incentivize productive narcissists for the benefit of shareholders. … You need a high level of motivation to motivate narcissists,” said Dworkis.
Data shows, for example, that narcissists focus more on seeking success than avoiding failure. Narcissists are “more sensitive to the gain domain than the loss domain,” according to Dworkis. That means one way accountants can incentivize narcissists to do the right thing by their companies financially is by rewarding them with smaller but more frequent bonuses.
Incentivizing narcissistic executives can also help improve voluntary reporting of financial problems and mergers/acquisitions decisions, encourage business leaders who shirk their work to be more productive, and help those with difficulty meeting deadlines and budgets do those things.
At their worst, as in the case of Enron Corp. chief financial officer and convicted fraudster Andy Fastow, narcissistic business people can help bring down companies. Fastow famously said of the collapsed Enron: “Do you realize what a great job I’ve done at this company?”
But it’s not all bad news with narcissists in business, according to Dworkis’ presentation. There are top executives such as Facebook Inc.’s Mark Zuckerberg and Amazon.com Inc.’s Jeff Bezos, who have strong narcissistic tendencies but are also highly creative and productive.
“There are narcissists who do well,” Dworkis said. “They have big egos and big dreams, but little respect for rules.”