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> Holding the CEO liable for employee misdeeds is like holding teachers responsible for teenagers getting into fights or having sex. This analogy doesn't hold

> Holding the CEO liable for employee misdeeds is like holding teachers responsible for teenagers getting into fights or having sex. This analogy doesn't hold for a lot of reasons, but the most obvious is that teachers don't get to choose their students. CEOs can (and should) fire employees that don't live up to their ethical responsibilities.

Para2016 7y ago
How many times have you been personally hired or fired by a CEO?
paulcole 7y ago
Should my local Walmart’s store manager be arrested because the cashier he hired was pocketing money from the till?
- geofft 7y ago
  That example isn't relevant here because a cashier pocketing money hurts the company. The behavior you want to penalize the company for is a cashier quietly doing something illegal that helps the company - and the only reason they would do that is if the company is expecting performance out of them that is difficult to achieve without illegal behavior. A classic example of this is the Wells Fargo fake account scandal. Managers who set impossible quotas for their salespeople, such that the salespeople felt compelled to steal their customers identities, should be arrested for identity theft, yes.
- reallydude 7y ago
  If a manager knows about an employee bribing a fire inspector, that's equivalent...since the topic is having a priori knowledge of bribery and failing to act (not the bribery itself) and not the simple case of wholesale theft, which is already a crime.
- StillBored 7y ago
  What about if he knew the cashier was stealing the money, was intentionally ignoring it, and maybe even cooking the books a little, to cover for that employee? Does lit change if the manager was benefiting from the theft in some way? That sounds a lot closer to what happened.
  - rayiner 7y ago
    Show me in the SEC filing where it suggests Wal-Mart’s executive leadership did anything like that: https://int.nyt.com/data/documenthelper/1331-walmart-sec-settlement/b7397b26206867625210/optimized/full.pdf#page=1 https://int.nyt.com/data/documenthelper/1331-walmart-sec-set...
    - StillBored 7y ago
      Did you read it? The bits I just read do nothing to invalidate the basic story here. Try page 6... Nice bits all over from walmarts own investigation: "The final report that was sent to Walmart in December 2004 omitted references, contained in earlier versions, to MXN $45.6 million (approximately USD $4 million) paid to one of the gestores that Mexico Subsidiary Lawyer A alleged was corrupt." Then there pieces where it talks about how the invoices are just lump sums rather than properly broken down and employees are claiming the the money is being given to the MX government officials.. "Investigator circulated a report concerning the Mexico Subsidiary allegations that stated that laws had been potentially violated, and recommended several additional investigative steps." "Walmart did not follow the investigators’ proposed action plans. On or around February 7, 2006, Walmart tasked Mexico Subsidiary Lawyer B with leading the remainder of the investigation." Of course none of this is going to be an email that says "hey this contractor is paying the government to speed up our permits, lets keep doing business with them." No its all just looking the other way and doing the minimum to follow the letter of the law and using back channels to cut out the really incriminating parts.
      - rayiner 7y ago
        As to the first quote, you’re omitting the very next sentence: “While the draft report stated that the transactions reviewed were reasonably appropriate, complied with documentation and classification standards, and were compliant with local policies, legislation and generally accepted accounting principles, it also described “unusual” and “facilitating” payments made in connection with Mexico Subsidiary’s use of gestores.” Note that the SEC filing specifically quotes the term “facilitating.” “Facilitating” payments—paying officials to do a non-discretionary duty faster—is not illegal under the FCPA. Bribery under the FCPA only includes payments to induce officials to exercise discretion in your favor.
dgzl 7y ago
A better analogy: Holding the CEO liable for employee misdeeds is like holding a principal responsible for teachers getting into fights or having sex. Or, whatever problems teachers cause
- vermilingua 7y ago
  A betterer analogy: Holding the CEO liable for employee misdeeds is like holding a principal responsible for students getting into fights or having sex. Just like the principal doesn’t choose the students, management often only hires their direct subordinates. The principal/CEO could expel students/employees directly, but it’s often met with opposition, more the further down the hierarchy they reach.
- watwut 7y ago
  When teachers end up physically fighting among themselves often, yes principal is responsible. Absolutely. Principal should have deal with the problem when it appeared first time. Principal is responsible for school culture. But, teachers are allowed to have sex.

Para2016 7y ago

How many times have you been personally hired or fired by a CEO?

paulcole 7y ago

Should my local Walmart’s store manager be arrested because the cashier he hired was pocketing money from the till?

geofft 7y ago
That example isn't relevant here because a cashier pocketing money hurts the company. The behavior you want to penalize the company for is a cashier quietly doing something illegal that helps the company - and the only reason they would do that is if the company is expecting performance out of them that is difficult to achieve without illegal behavior. A classic example of this is the Wells Fargo fake account scandal. Managers who set impossible quotas for their salespeople, such that the salespeople felt compelled to steal their customers identities, should be arrested for identity theft, yes.
reallydude 7y ago
If a manager knows about an employee bribing a fire inspector, that's equivalent...since the topic is having a priori knowledge of bribery and failing to act (not the bribery itself) and not the simple case of wholesale theft, which is already a crime.
StillBored 7y ago
What about if he knew the cashier was stealing the money, was intentionally ignoring it, and maybe even cooking the books a little, to cover for that employee? Does lit change if the manager was benefiting from the theft in some way? That sounds a lot closer to what happened.
- rayiner 7y ago
  Show me in the SEC filing where it suggests Wal-Mart’s executive leadership did anything like that: https://int.nyt.com/data/documenthelper/1331-walmart-sec-settlement/b7397b26206867625210/optimized/full.pdf#page=1 https://int.nyt.com/data/documenthelper/1331-walmart-sec-set...
  - StillBored 7y ago
    Did you read it? The bits I just read do nothing to invalidate the basic story here. Try page 6... Nice bits all over from walmarts own investigation: "The final report that was sent to Walmart in December 2004 omitted references, contained in earlier versions, to MXN $45.6 million (approximately USD $4 million) paid to one of the gestores that Mexico Subsidiary Lawyer A alleged was corrupt." Then there pieces where it talks about how the invoices are just lump sums rather than properly broken down and employees are claiming the the money is being given to the MX government officials.. "Investigator circulated a report concerning the Mexico Subsidiary allegations that stated that laws had been potentially violated, and recommended several additional investigative steps." "Walmart did not follow the investigators’ proposed action plans. On or around February 7, 2006, Walmart tasked Mexico Subsidiary Lawyer B with leading the remainder of the investigation." Of course none of this is going to be an email that says "hey this contractor is paying the government to speed up our permits, lets keep doing business with them." No its all just looking the other way and doing the minimum to follow the letter of the law and using back channels to cut out the really incriminating parts.
    - rayiner 7y ago
      As to the first quote, you’re omitting the very next sentence: “While the draft report stated that the transactions reviewed were reasonably appropriate, complied with documentation and classification standards, and were compliant with local policies, legislation and generally accepted accounting principles, it also described “unusual” and “facilitating” payments made in connection with Mexico Subsidiary’s use of gestores.” Note that the SEC filing specifically quotes the term “facilitating.” “Facilitating” payments—paying officials to do a non-discretionary duty faster—is not illegal under the FCPA. Bribery under the FCPA only includes payments to induce officials to exercise discretion in your favor.

dgzl 7y ago

A better analogy: Holding the CEO liable for employee misdeeds is like holding a principal responsible for teachers getting into fights or having sex. Or, whatever problems teachers cause

vermilingua 7y ago
A betterer analogy: Holding the CEO liable for employee misdeeds is like holding a principal responsible for students getting into fights or having sex. Just like the principal doesn’t choose the students, management often only hires their direct subordinates. The principal/CEO could expel students/employees directly, but it’s often met with opposition, more the further down the hierarchy they reach.
watwut 7y ago
When teachers end up physically fighting among themselves often, yes principal is responsible. Absolutely. Principal should have deal with the problem when it appeared first time. Principal is responsible for school culture. But, teachers are allowed to have sex.