Many of us think we are harder working, more intelligent and better drivers than the average person. We also think we are morally superior. A 2014 study found that even convicted prisoners thought they were morally better – not just than the average prisoner but than the average person outside. The study, at a prison in the south of England, asked inmates to rate themselves against the average prisoner and the average member of the community for traits such as morality, kindness, honesty, self-control and being law-abiding. Although the convicts were serving sentences for violence, robbery, drug offences and burglary, they rated themselves as virtuous. Only on one trait did they think they were not superior to the average non-prisoner: being law-abiding. They felt they and people outside were equally law-abiding. Now a new study in the Social Psychological and Personality Science journal has shown that people, this time in the non-prison population, think they are more just and virtuous than average. But it goes on to pose an interesting question: can people’s sense of moral superiority lead them to behave dishonestly? The researchers, Ben Tappin and Ryan McKay of Royal Holloway, University of London, say previous studies provide competing answers on this issue. Some research has found that the illusion of moral superiority can lead people to behave badly because, like the prisoners in the first study, they think they really are, deep down, good people. Other research shows that “to the extent that people value belief-behaviour consistency”, people who think they are honest behave honestly. “We defer to future research to test these hypotheses,” the Royal Holloway study says. I was, however, struck by the first hypothesis because I thought it might explain a puzzle: why do companies that believe themselves to be ethically virtuous find themselves doing unvirtuous things? Two examples are the banks HSBC and Wells Fargo, which have both found themselves in trouble. Last year, HSBC confessed that the tax evasion scandal at its Swiss private banking arm was a “source of shame”. The scandal was all the more striking because Stephen Green, HSBC’s previous boss, had written a book called Good Value: Reflections on Money, Morality and an Uncertain World. Wells Fargo admitted this year that its staff had tried to meet their sales targets by setting up accounts for customers without their consent. Warren Buffett, head of Berkshire Hathaway, Wells Fargo’s biggest shareholder, described it as “a great bank that made a terrible mistake”. There are possible explanations for these falls from grace. HSBC had acquired its Swiss bank and said it had not integrated it properly. Wells Fargo appeared to be a classic case of financial incentives distorting employees’ behaviour. But I wondered about the “better than average” research cited above. Could the illusion of moral superiority apply to organisations as well as individuals? And could companies believe they were so superior morally that the occasional lapse into immorality did not matter much? The Royal Holloway researchers said they had recently conducted experiments examining just these issues and were preparing to publish the results. They had found that political groups with a sense of moral superiority felt justified in behaving aggressively towards opponents. In experiments, this meant denying them a monetary benefit. “It isn’t difficult to imagine a similar scenario arising in a competitive organisational context. To the extent that employees may perceive their organisation to be morally superior to other organisations, they might feel licensed to ‘cut corners’ or behave somewhat unethically – for example, to give their organisation a competitive edge. “These behaviours may be perceived as justified?…?or even ethical, insofar as they promote the goals of their morally superior organisation,” they told me. In explaining its behaviour, HSBC suggested that inquiring too closely into its customers’ tax affairs might have led to them taking their business elsewhere. The Wells Fargo incentives were originally put in place to drive the opening of new accounts, which would have given the bank an advantage over its competitors.