Tell When A CEO Is Lying

To tweak an old joke, how can you tell when a CEO is lying? A: When their mouth is moving. Or, you can look for certain key phrases, as researchers did in scrutinizing what was said in corporate earnings calls by executives who later had to restate earnings. They found a few patterns:

Lying executives tend to:

* Overuse the word “we” and “team,” they almost never say “I.”
* Use hyped-up, fluffy language. They say “fantastic,” “superb,” “outstanding,” “excellent” as a form of overcompensation.
* Sidestep questions. When one company was asked whether their books could be trusted, the CEO responded by saying they hired the best auditing company in the world.

Another tendency among male liars is they put their hands in their pockets with their index fingers pointed towards their crotch.

How Can You Tell When A CEO Is Lying? [NPR]

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  1. SteveZim1017 says:

    Female liars stick their hands under their armpits and point with their index fingers at their chest….

  2. AngryK9 says:

    I always wondered why my girlfriend looked at me strangely when I pointed my thumbs toward my jewles…

  3. xguile says:

    Steve Jobs can tell no lies. Everything he says he believes to be true.

  4. Loias supports harsher punishments against corporations says:

    “How to Tell When a CEO Is Lying”

    1) Is he talking?

    Yes) He’s lying.
    No) He’s coming up with the next lie.

    This concludes your CEO Lie Detection Training.

  5. AI says:

    Based on this and the Q3 results meeting I was in yesterday, our management is always lying.

  6. Onesnap says:

    My favorite is during a company meeting when the CEO tells everyone they are replaceable and that he will fire any of us on the spot if we ignore the phone when a client calls. Managing with fear. Gotta love it.

    • econobiker says:

      Well, everyone IS replaceable but at what cost?

      So the CEO will layoff the guy/gal with 20 years experience and huge customer interaction and replace him/her with a newly minted MBA grad in his/her mid 20s at half the salary. Then the CEO blames the resulting losses on market conditions and keeps crowing about how he reduced costs this year even in a bad market…

      • Back to waiting, but I did get a cute dragon ear cuff says:

        Circuit City?

      • maruadventurer says:

        econbiker,

        Depends on the type of customer interaction. If you’re a salesman selling a million dollar product and the top 10 salesperson in the office, you are gold and irreplaceable. If you sit in a call center reading off a script, yep you are replaceable by somebody in India.

        But trust me, the 20 something MBA will get their comeuppance. I have seen the MBA wonders come and go. They might be smart, even well educated, but there is a difference between education and wisdom. I could tell my director with 80% certainty which ones would make past a year and which could not by asking just one simple question. Only 1 in 10 could provide the right answer.

        • Bagumpity says:

          OK, I’ll bite: What was the one question?

          (Or is this some sort of Zen koan? Is the right answer to the one question just asking what the one question is?)

          Do Zen cows go Mu?

    • intense_jack says:

      Holy crap! You work at DishNetwork?!?!
      If not, then at least your CEO didn’t tell you he doesn’t want you working there if you don’t carry their product. Even if you don’t have a view of the southern sky and can’t get the service, just put the equipment in the closet and have an account… then he sent his managers around with lists of employees that didn’t have a DishNetwork account. This was all over the company, but especially at corporate right before their yearly layoffs.

    • JiminyChristmas says:

      The sad thing about how CEO culture at large corporations has evolved is that it doesn’t really matter what happens with the staff. The executive is going to be filthy stinking rich no matter what happens. By the time a bad CEO drives a company into the ditch he’ll be floating off in his golden parachute.

      An executive who issues blanket threats to employees obviously feels no accountability towards them. He’s the master and everybody else is just working on the plantation.

    • runswithscissors says:

      In my experience this is most big corporations. “Management by Fear” must be the secret #1 selling How-To Management book that the rest of us don’t know exists, because hot damn do most “successful” managers employ it.

  7. econobiker says:

    When he says “We are doing this for the benefit of either the customer, company, or employees.” versus for just his personal benefit.

  8. maruadventurer says:

    Mr. Popken,

    I know you are just pointing out what NPR quoted. However I feel the need to point out the fallacy of the reporting any why you should be cautious. –

    * Overuse the word “we” and “team,” they almost never say “I.”

    The choice of we vs I is corpspeak. If you work in a Fortune level company saying I is nearly the equivalent of the N word. So that observation could be leveled at the janitor, cube crawler, middle manager, director, VP or CEO of any US Fortune sized company. So its attribution to merely the ‘C’ class executives is incorrect.

    * Use hyped-up, fluffy language. They say “fantastic,” “superb,” “outstanding,” “excellent” as a form of overcompensation.

    What pitchman does not do this? I could lay that same charge against Madison Ave intoto. Do CEO’s do it? Sure they do, because they are scripted to. Think they wrote their own copy? I doubt it. That came from the PR dept. And where do the PR people come from? Madison Ave.

    * Sidestep questions. When one company was asked whether their books could be trusted, the CEO responded by saying they hired the best auditing company in the world.

    The question is valid however the example is bogus in the extreme. There is a little law called Sabanes-Oxley. Remember that? Well the consequence of that law are that should a CEO misstate in any form the nature of his companies books (even innocently) he gets a free date with Bubba in the federal pen of the prosecutor’s choice. It is the equivalent of a federal gag order that practically, only the supervising external auditor may speak about in public. The exec in that case was proper in his/her actions to the question posed. Maybe badly opined but proper none the less.

    This is a case where the Press, largely uneducated in law and business affairs opines in a vacuum about an issue. The NPR report being very slanted.

    • TuxthePenguin says:

      Thank you for pointing out the auditor/books issue. I thought I was going to have to post about that…

    • smo0 says:

      Doesn’t change the fact that it is a lie and it always results in someone being fucked over.

      So how about this: “Another tendency among male liars is they put their hands in their pockets with their index fingers pointed towards their crotch.”

      I notice you didn’t “touch” on that so.. is it safe? Can I use that as a guideline?

      I don’t know what line of work you’re in, probably in some legal department – which encourages lying… but being the person that’s always lied to… Me… that’s the business I’M IN…

      It’s not appreciated.

    • benson304 says:

      Sounds like we’ve got a fellow auditor here.

      The CEO discussed must have hired my firm, since we’re the best in the world ;)

    • Megalomania says:

      The “I” vs “We” thing relates to questions posed directly to the person ABOUT the person rather than the company. In other words, if someone asks you if there’s a problem with corruption and you say “We don’t think there is” . You are presumably referring to questions that ask things in perspective of their position as CEO, such as “When are you releasing product X”, in which case saying “We plan to…” is perfectly correct and to say otherwise would be a Steve Jobs like level of arrogance akin to putting your name on every patent to boost your own ego.

    • peebozi says:

      How many CEO’s have been prosecuted and convicted under SOA?

      If you say, none or few, then this is EXACTLY the reason they sidestep questions.

    • Bsamm09 says:

      Well Auditors are mainly looking for material misstatements and audits are not designed to detect fraud. But for all intents and purposes, the books can be relied on by a reasonable investor. Also, having a non-qualified opinion doesn’t mean the company is healthy. I think a lot of people make this mistake.

  9. Mcshonky says:

    Use this information when listening to the police after a controversial shooting.

  10. blinky says:

    magical

  11. BigHeadEd says:

    Another word to watch out for is “enhance”. When the CEO says “We are enhancing our employee benefits package” what he is actually saying is “making it cheaper for the company by taking some of the benefits away”. If they were actually adding benefits, he’d say just that, ad nauseam.

  12. kaltkalt says:

    Seems like the most basic of common sense to me. Except for the crotch thing, which is just bullshit, and you can’t see that in a 10-K anyway.

  13. oldwiz65 says:

    So do CEOs ever tell the truth in the first place?

  14. RogueWarrior65 says:

    I call bullsh*t. Obama lies all the time and he never uses the word “we” unless it’s in reference to paying taxes in which case he really means “you all”.

    • RvLeshrac says:

      When, exactly, has he lied, vs. overstating his legislative power (as all Presidents have done)?

      His responsibilities and powers don’t enable him to simply *do* things, and the Conservatives (both Conservative Democrats and Conservative Republicans) would throw temper-tantrums if he attempted to govern by fiat.

      He frequently says “I am going to [end/start] [program],” when what he means is “I am going to attempt to use my political capital to encourage Congress to pass legislation to [end/start] [program].”

      His problem is that he’s trying to govern the way this country was meant to be governed, in the interest of the common people, while working against Congress, which is governing in the interest of NewsCorp, corporations, and the hyper-rich.