As noted by MIT Professor of Management Tom Malone, when former CEO John Stumpf was asked by the media why anyone would risk their career by engaging in the misconduct chronicled at Wells Fargo, Stumpf voiced a frustration that is common to C-suites and boardrooms at many firms: “I don’t know how to explain human behavior.”1 OUR VIEW p. 28
But, increasingly, CEOs and boards are being asked to do precisely that, and particularly in the wake of misconduct scandals. The immediately preceding section sheds some light on what behavioral science teaches us in this context. “The term social capital emphasizes not just warm and cuddly feelings,” Putnam writes, “but a wide variety of quite specific benefits that flow from the trust, reciprocity, information, and cooperation associated with social networks.”2
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