4 ms·

Penalties for corporate misbehavior are absurdly small, particularly in cases of obvious malice or fraud. Until executives and shareholders feel real pain, com

by blunte 9y ago

Penalties for corporate misbehavior are absurdly small, particularly in cases of obvious malice or fraud. Until executives and shareholders feel real pain, companies can simply make their decisions based on cost outcomes. In most cases, the financial incentive to cheat and flaunt the law is just too great compared to the risk of penalty. Throw some execs in jail, starting with the CEO. If CEOs are so valuable that they can be paid 100x median employee wage, then they should have some real responsibility. And penalize the stock in some way so the investors feel the pain. Sure, it's not their fault necessarily; but if you make the investors angry enough, they will demand proper behavior from the companies they invest in.

staticautomatic 9y ago
There is still the possibility that this would weigh in favor of an unusually large damage award against Sutter. In many antitrust cases, the judge is allowed to triple the amount of damages the jury awards, if he/she sees fit.
empath75 9y ago
Along with more obvious reasons like corruption, one reason prosecutors don’t like to go after shareholders or shut down the company is that there are a lot of people who work for these companies who aren’t responsible for bad acts, who have families to support and putting lots of people out of work for something out of their control is political suicide.
- mastax 9y ago
  e.g. https://en.wikipedia.org/wiki/Arthur_Andersen https://en.wikipedia.org/wiki/Arthur_Andersen
- deleted 9y ago
  [deleted]
- SomeStupidPoint 9y ago
  That argument is based on the premise that the best thing to do is be cowardly if it benefits you, even if it costs a lot of people who you have a duty towards substantial amounts. The long term prospect of repeatedly caving to corruption taking relatively small portions of the population hostage is eventual corruption of the entire system -- death of the system -- which costs the futures of the very people who would be angry at you. I'm not sure I agree with that premise.
- ablekh 9y ago
  This makes no sense, because CEOs are not irreplaceable (and, thus, should not be immune). Just replace a bad CEO with a good one and all "innocent" workers will not only not suffer, but will be in a better shape due to expected overall improvement of the company's culture and performance.
  - wjnc 9y ago
    The 'just replace' kind of makes no sense. Replacing senior staff has all kinds of ripple effects throughout a corporation. I would propose that hardly any illegal or immoral act of big corp starts with the CEO. It's a cabal usually. Just cutting the head of won't work. I would like to read about clearly immoral companies coming clean, tips? In fear many only clear their act up in nominem.
    - ablekh 9y ago
      I stand by my opinion, but you have to read it not literally. Firstly and obviously, the phrase "just replace" is somewhat a simplification, even though I believe that, in any decent organization, it should not have any ripple effects at all. Secondly, assuming you attempt to read between lines, my points do not specifically target CEOs per se, but upper management, who almost always is the mastermind, initiator, orchestrator and beneficiary of illegal and/or immoral acts in corporations ("cabal" in your parlance).
snarf21 9y ago
I share your frustration but any smart CEO will have plausible deniability. Additionally, this is trying to fix it after the fact. The thing that has stuck in my brain for a while now that the way to solve this issue is with better whistle blower programs. In general, people (usually more than one) in the middle know what they are being asked to do is illegal (or highly questionable, like not disclosing a piece of data about a drug side effect) but fear being fired. Having $10M+ payouts for whistle blowing has the potential to remove that risk. I am making an assumption here that the whistle blower's identity would remain secret, potentially similar to witness protection. So where would the money come from? I think the right answer is the ability of the government to freeze assets (not monthly payroll) and make it so that executives selling stock once the investigation starts would be guilty of insider trading. The details are all solved here but it is meant as a jumping off point. The biggest challenge would be getting this to pass as most of the companies that are guilty of these things are major candidate backers and pay for tons of lobbying efforts.
cwkoss 9y ago
If they have 100x the wage, they should have 100x the liability

by blunte 9y ago

staticautomatic 9y ago

There is still the possibility that this would weigh in favor of an unusually large damage award against Sutter. In many antitrust cases, the judge is allowed to triple the amount of damages the jury awards, if he/she sees fit.

empath75 9y ago

Along with more obvious reasons like corruption, one reason prosecutors don’t like to go after shareholders or shut down the company is that there are a lot of people who work for these companies who aren’t responsible for bad acts, who have families to support and putting lots of people out of work for something out of their control is political suicide.

mastax 9y ago
e.g. https://en.wikipedia.org/wiki/Arthur_Andersen https://en.wikipedia.org/wiki/Arthur_Andersen
deleted 9y ago
[deleted]
SomeStupidPoint 9y ago
That argument is based on the premise that the best thing to do is be cowardly if it benefits you, even if it costs a lot of people who you have a duty towards substantial amounts. The long term prospect of repeatedly caving to corruption taking relatively small portions of the population hostage is eventual corruption of the entire system -- death of the system -- which costs the futures of the very people who would be angry at you. I'm not sure I agree with that premise.
ablekh 9y ago
This makes no sense, because CEOs are not irreplaceable (and, thus, should not be immune). Just replace a bad CEO with a good one and all "innocent" workers will not only not suffer, but will be in a better shape due to expected overall improvement of the company's culture and performance.
- wjnc 9y ago
  The 'just replace' kind of makes no sense. Replacing senior staff has all kinds of ripple effects throughout a corporation. I would propose that hardly any illegal or immoral act of big corp starts with the CEO. It's a cabal usually. Just cutting the head of won't work. I would like to read about clearly immoral companies coming clean, tips? In fear many only clear their act up in nominem.
  - ablekh 9y ago
    I stand by my opinion, but you have to read it not literally. Firstly and obviously, the phrase "just replace" is somewhat a simplification, even though I believe that, in any decent organization, it should not have any ripple effects at all. Secondly, assuming you attempt to read between lines, my points do not specifically target CEOs per se, but upper management, who almost always is the mastermind, initiator, orchestrator and beneficiary of illegal and/or immoral acts in corporations ("cabal" in your parlance).

snarf21 9y ago

I share your frustration but any smart CEO will have plausible deniability. Additionally, this is trying to fix it after the fact. The thing that has stuck in my brain for a while now that the way to solve this issue is with better whistle blower programs. In general, people (usually more than one) in the middle know what they are being asked to do is illegal (or highly questionable, like not disclosing a piece of data about a drug side effect) but fear being fired. Having $10M+ payouts for whistle blowing has the potential to remove that risk. I am making an assumption here that the whistle blower's identity would remain secret, potentially similar to witness protection. So where would the money come from? I think the right answer is the ability of the government to freeze assets (not monthly payroll) and make it so that executives selling stock once the investigation starts would be guilty of insider trading. The details are all solved here but it is meant as a jumping off point. The biggest challenge would be getting this to pass as most of the companies that are guilty of these things are major candidate backers and pay for tons of lobbying efforts.

cwkoss 9y ago

If they have 100x the wage, they should have 100x the liability