Signs Your Boss Is Lying to You

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If your boss says something is fantastic, chances are, it’s probably not.

A recent study found that deceptive CEOs tend to express “more extreme positive emotions” when trying to cover up something and forego language that makes them seem hesitant or uncertain.

Two researchers at Stanford’s Graduate School of Business have scoured through transcripts of 30,000 conference calls involving CEOs and CFOs of businesses around the country between 2003 and 2007. The researchers then compared what these executives were saying about their business’s finances to what was actually the case. The goal was to figure out how their choice of words change while lying.

“Our primary assumption is that CEOs and CFOs know whether financial statements have been manipulated, and their spontaneous and (hopefully) unrehearsed narratives provide cues that can be used to identify lying or deceitful behavior,” the researchers wrote in their report.

According to the study, these executives are also more likely to speak in the third person, rely on generalities and swear more often. So if you notice the person in charge of your company shouting expletives, the business may be in trouble. Either that, or your boss just had a pretty bad day.

The researchers do point out that CFOs differ a little bit in their speaking habits though. Unlike CEOs, these higher-ups generally do not resort to extremely negative or extremely positive language when lying about finances. It seems they are a bit better about remaining balanced and keeping a poker face.

Still, in reporting this study, The Economist noted that these results could provide valuable insights for investors listening in on conference calls (as well as public relations people who may now need to instruct executives in how to avoid these speaking habits.)

However, there is still some doubt about how accurate these results are. As Joe Navarro points out in PsychologyToday, it’s very difficult to boil down the psychology of deception to a few particular speaking habits. “If someone were to take what this study has put forward and run with it and accuse a CEO or CFO of being deceptive, attorneys will have a field day with lawsuits,” Navarro writes.

Check out our roundup of CEOs who have received outrageous severance packages despite disappointing the company in some way.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.

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