Categories: OLD Media Moves

How to tell if a CEO is lying to you

Kyle Stock of The Wall Street Journal reports about some Stanford University research that provides clues to whether a CEO is lying while speaking.

Stock writes, “A pair of professors at Stanford recently tried to do just that. The team built a model that tries to flush out executive lies, using psychological and linguistic studies and transcripts of conference calls from companies that later restated earnings.

“They fed their filter almost 30,000 earnings transcripts from 2003 to 2007 and found that it worked quite nicely. Executives who later had to revise their books displayed some very consistent clues.

“For one, they seldom referred to themselves or their firms in the first person; ‘I’ and ‘we’ were replaced by terms like ‘the team’ and ‘the company.’ Deceitful executives passed up humdrum adjectives like ‘solid’ and ‘respectable’ in favor of gushing words like ‘fantastic,’ and (not surprisingly) they seldom mentioned shareholder value.

“They also tended buttress their points with references to general knowledge with phrases like ‘you know’ and to make short statements with little hesitatation, presumably because they had carefully scripted the untruths in advance and had no interest in lingering on them.”

Read more here. Specific companies were not identified in the study.

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Jessica Goldberg says:
September 14, 2010 at 2:25 am
The sad truth is, often big business CEO’s like PR agents and politicians will try to fool reporters into telling the story, which shows the business in a favorable light. The thing is that is not always the case and it is hard to tell when anyone, especially CEO’s, honestly believe in their company or if they are lying. I will definitely make note that this study found that lying executives tend to talk of their business as an object and less personalized. The best way to go about reporting a story that you are unclear whether or not the CEO is lying is to try to paraphrase what they are saying rather than using a ton of direct quotes because their quotes tend to be loaded with powerful wording meant to persuade. Also, make sure that you verify the information they give you; obtaining records if possible is the clearest way to determine the truth.