Contrary to the popular belief that power corrupts, research suggests it acts as an amplifier. If a person is already "pro-social"—oriented towards helping others—power can increase their empathy and effectiveness. If they are selfish, power will magnify those negative traits.

Public perception sees corporate fraud as a rare, company-defining event. The reality inside Fortune 100 companies is that substantial violations occur frequently—as often as every few days. Management's job isn't to eliminate misconduct entirely, but to manage its frequency and severity to keep it small and internal.

Small lies can snowball into major fraud because the brain habituates to the act of lying. With each lie, the emotional centers of the brain that signal negative feelings respond less strongly. This reduction in guilt or discomfort removes the natural barrier to escalating dishonesty.

Instead of just preaching integrity, leaders must actively design systems that don't reward employees for achieving goals unethically. Character is what someone does when no one is looking, so a leader's role is to structure the environment to prevent integrity breaches before they happen, rather than just reacting to them.

As Charlie Munger taught, incentive-caused bias is powerful because it causes people to rationalize actions they might otherwise find unethical. When compensation depends on a certain behavior, the human brain twists reality to justify that behavior, as seen in the Wells Fargo fake accounts scandal.

People surrounding a so-called genius, like Picasso's friends or employees at cult-like startups, often tolerate terrible behavior. They rationalize the unpleasantness by telling themselves they are part of an extraordinary, history-making experience, which creates a toxic enabling environment.

Whether in old industries like oil or new ones like AI, amassing massive wealth attracts a personality type willing to eliminate threats to protect their power. This dynamic is about the psychology of power itself, not the specific industry a company operates in.

The solution to the "too ambitious" problem seen in corporate scandals like Enron isn't to dial down ambition. Instead, it's to channel that powerful drive towards positive, moral outcomes. This reframes ambition from a potential vice into a potent force for good when given the right direction.

Inexperienced professionals often mistake the correlation between talent and abrasive behavior for causation. In reality, success provides a buffer that allows talented people to be jerks without immediate consequences; the bad behavior itself is not a component of their success.