Hubris in Business and Management Research: A 30-year Review of Studies

On a visit to the London School of Economics (LSE) in November 2008, Her Majesty the Queen understatedly but pointedly inquired why no one had noticed beforehand that the credit crunch was on its way. In response, a Forum was held at the British Academy, the purpose of which was to draft the basis of an ‘unofficial command paper’ to answer the Queen’s seemingly naïve question. In the letter to Buckingham Palace which followed from Professor Tim Besley (LSE, and member of the Bank of England Monetary Policy Committee 2006–2009) and Professor Peter Hennessey (Queen Mary, University of London), and was signed by over 30 eminent scholars, civil servants, and business leaders, the humble response to Her Majesty was that although there were admittedly a few warning voices in the financial and policy jungle

most [experts] were convinced that banks knew what they were doing. They believed that the financial wizards had found new and clever ways of managing risks. Indeed, some claimed to have so dispersed them through an array of novel financial instruments that they had virtually removed them. It is difficult to recall a greater example of wishful thinking combined with

hubris

. (British Academicians’ Letter to The Queen, 22 July 2009, emphasis added)