Shirking, Opportunism, Self-Delusion and More: The Agency Problem Lives On

27 Pages Posted: 20 Nov 2013

Date Written: November 20, 2013


What factors explain the behaviors of corporate leaders who engage in spectacular frauds? Is it greed? Is it power? Are these leaders, as some critics allege, simply psychopaths? Or is something else going on? In this Essay created for a symposium on the “agency problem,” Professor Barnard explores the greed, power, and psychopathy theories. She also suggests that a hormonal phenomenon – an overabundance of testosterone – may explain these men’s behavior. In many animal populations, success in competition leads to an elevation of testosterone. Repeated successes – accompanied by increasing levels of testosterone – often lead to rash, ill-considered, and dangerously risky behaviors. Animal biologists call this progression “the winner effect.” Barnard suggests that a similar progression may be seen in human competitors, both in athletic environments (think Lance Armstrong) and in business environments (think Jeff Skilling, Richard Scrushy, and Rajat Gupta). She concludes that some agency problems may be physiologically driven.

Keywords: corporate fraud, white collar crime, risk-taking, power, chief executive officers, hubris syndrome, winner effect, testosterone overload, agency problem

Suggested Citation

Barnard, Jayne W., Shirking, Opportunism, Self-Delusion and More: The Agency Problem Lives On (November 20, 2013). Wake Forest Law Review, Vol. 48, 2013, William & Mary Law School Research Paper No. 02-265, Available at SSRN:

Jayne W. Barnard (Contact Author)

William & Mary Law School ( email )

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