An Interview with Stephen Scott, Founder and CEO, Starling Trust
by Maurice Evlyn-Bufton, CEO of Armstrong Wolfe
Q – With an enriched academic and professional career, and having lived in many countries, at what point on this journey did you consciously turn your attention to understanding human behaviour?
A – “I think I’ve always been interested in human behavior, and what’s shifted over the years is the ‘unit of analysis’: the individual (psychology), the group (sociology), the state (international relations) – and you can’t really discuss any of that meaningfully without a good grounding in philosophy and natural science.”
Q – What aspects of this behaviour particularly interested you and why?
A – “I’m intrigued by patterns in behavior that we see replicated over and again, regardless of time period in history, the type of organization, the language and culture of the people involved, the nature of the institutions and/or organizations that set context. The human organism is very consistent. And if you draw on the various academic domains I just referenced, you can start to plot out what patterns are most likely to be seen, where, and when.”
Q – For much of your career your clients have come to you for business intelligence and risk analysis. I read with interest that much of this counsel and direction, certainly when you were leading Scott International, was focused on unravelling the frailties in human behaviour, cases involving fraud, corruption, misuse of power and position. What commonalities did you observe as to the failings of organisations and companies that had been exposed by such unlawful behaviour?
A – “My answer here follows directly from what I just said a moment ago: the species is consistent. Regardless of where in the world I may have been working, in cases of wrong-doing I’ve been asked to investigate — whenever I’ve asked people “why did you do that, knowing it was wrong?” — I almost always heard the same answer: “I had no choice.” This speaks to the power of peer expectations and an evolutionary trait towards maintaining peer-belongingness through “normative compliance.” That is a consistently observable pattern.”
Q – The evolutionary link to address such failures in the corporate and banking world has been investment in compliance, risk management and their consequent controls. Despite significant investment, much of this effort driven by the law and regulatory demands, it appears (the banking) industry has failed to reduce and/or address the prevalence of on-going incidents and failures. Why do you think this is?
A – “Fundamentally, I believe, this is because our contemporary model for what it is that drives human behavior is, in a word, wrong. We like to believe that Man is a rational actor — homo Economicus — carefully deliberating action choices with a view to maximizing gain, which is almost always conceived of in financial terms. Hence the oft-heard view that “if we just get the incentive scheme right, desired behaviors will follow automatically.”