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Amid the shock over the Steinhoff debacle, a crucial aspect that has escaped commentary is the possible interplay between corporate governance and psychological phenomena. The field of behavioural finance seeks to understand what motivates corporate executive decisions, especially corporate gangsterism. Much of the literature is explained via sophisticated models, which are nonetheless largely exploratory and rely on untested assumptions. In short, behavioural finance scholars argue that at the helm of companies are executives who are imperfect processors of information and who are subject to bias, error and perceptual illusions. These executives constantly contrive to beat the market. At the heart of such contrivances are psychological factors; fear, unbreakable and systemic hubris, and overconfidence. A question that has confounded many is how Steinhoff's board - composed of luminaries of corporate leadership - failed to foresee the critical warning signs and could not make strate...

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