Some of you may recall the 60 minute interview of Ken Lewis, who at the time was the CEO of Bank of America. Lewis described how Bank of America was forced to take money from the Feds, though he stated that B of A did not need. In an article it states that:
“It’s said that one of the main reasons the [Bank of America] is doing well is because of your decision not to get into sub prime mortgages,” Stahl said.
“In 2001, my first year as CEO, we decided that we just didn’t like the business. It was too risky. And so we decided to get out of it.”
We later learned that Lewis was lying through his teeth and that B of A was up to their elbows in sub-prime mortgages.
So should any of us doubt the fact that almost all CEOs are liars? According to another article here is a way to spot the CEOs who lie to the public:
Larcker and Zakolyukina pored through the transcripts of thousands of corporate earnings calls when CEOs and chief financial officers take questions from analysts.
And then they studied the words of executives at companies that later had to restate earnings, which often happens after fraud has occurred. The researchers identified some key indicators of deception.
Zakolyukina says lying executives tend to overuse words like “we” and “our team” when they talk about their company. They avoid saying “I.”
She says there’s a reason for that: “If I’m saying ‘I’ or ‘me’ or ‘mine,’ I’m showing my ownership of the statement, so psychologically I’m showing I’m responsible for what I’m saying.“
But here is the real clincher on how to stop a liar:
Lying CEOs also tend to use a lot of words that express positive emotion — things are fabulous and fantastic and extraordinary.
I don’t believe that the problem is that one or two CEOs lie. The problem is that the majority of them lie. This seems to be a normal practice and the public cannot trust what the CEOs from any company says.