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When the end result is fines that are absorbed as a cost of business, why would we expect anything different? It’s high time to hold the leaders of misbehaving

When the end result is fines that are absorbed as a cost of business, why would we expect anything different? It’s high time to hold the leaders of misbehaving companies to account.

SoftTalker 3y ago
Well also the derailments and accidents. That can't be cheap. Do they just convince themselves it won't happen?
- passwordoops 3y ago
  They convince themselves that with their market power, they'll be able to absorb the cost of any settlement... which has been the case for a while now
  - Nevermark 3y ago
    Today, corporate leaders are fundamentally, and therefore rationally, aligned toward optimizing short term results. Their personal risk is short term profit shortfalls, while shareholders and the corporation as a whole carry the longer term risks. Even more misaligned, is the case of public companies. The shorter term someone holds shares, the more impact they have (buying & selling) on current share price, while demanding shorter term results. Without actual personal accountability from company leaders, criminal & civil, no amount of long term corporate risk, will change their rational response to incentives. There is a good reason that dynamic companies “over compensate” their leaders with eye watering stock grants. It isn’t well earned compensation. It is a tool to align interests, benefitting everyone. But for slower growing companies, that is too costly. So for all companies, liability protection for shareholders should be matched by liability acceptance not just from the corporation as a whole, but when it comes to malfeasance, individuals responsible for the malfeasance.
    - gruez 3y ago
      >but when it comes to malfeasance, individuals responsible for the malfeasance. How would that work? Individuals actors within corporations are already responsible for malfeasance. If you took it upon yourself to commit some crimes to boost your KPIs so you get a bigger bonus (eg. threatening employees with violence), being in a corporation isn't going to protect you. Even if you're the boss and you're telling your direct reports to commit crimes, that's still a crime.
      - Nevermark 3y ago
        Malfeasance in the regulatory violations and culpability for irresponsibility sense. Not just criminal. If the corporation is found culpable, or pleads no contest to culpability to reduce their fines or other repercussions, then executive, management or individual culpability would be determined (if any) by an outside party chosen by the board, acting in the interest of shareholders. Details, are not the point I am making, but that is one model. Whatever the process, it would be set in the corporate bylaws, and a minimum process required by stock exchanges to maintain listing. And possibly by law regarding corporate requirements - given law is what defines the balance of shareholder liability vs. corporate liability. This would add corporate employee liability to that balance.
        gruez 3y ago
        >then executive, management or individual culpability would be determined (if any) by an outside party chosen by the board, acting in the interest of shareholders. What makes you think that "the big fish" will end up being punished, rather than the low level employees?
        Nevermark 3y ago
        The devil is always in the details. I can see this improving things simply because the possibility/process of accountability is likely to result in more responsible behavior from everyone. But I can see your point too.
- taberiand 3y ago
  They probably convince themselves they'll have moved on to something else before then, or otherwise get a hefty golden parachute when shtf and they bail out
- wredue 3y ago
  No silly. They just complain to the feds when it happens, and get a nice big fat day of “getting away Scott free” while tax payers foot the majority of the cleanup cost. The saying is “privatize profits, socialize losses” for a reason.
  - gruez 3y ago
    >while tax payers foot the majority of the cleanup cost. source?
  - kortilla 3y ago
    > The saying is “privatize profits, socialize losses” for a reason. It’s a saying because it’s a catchy socialist rallying cry, not because it has any relevance to the event in question.
    - hughesjj 3y ago
      It's also a saying because it's trueeee (See: Superfund sites, this event in question, climate change, highways and car based infrastructure, etc...)
      - gruez 3y ago
        >highways and car based infrastructure, etc...) If you follow this line of logic, it quickly gets absurd. The whole point of government is to do things that benefit society as a whole, but aren't feasible to do on a for profit basis (eg. roads, police, schools, etc.). Private companies and individuals are inevitably going to reap benefits as a result. If that constitutes "privatize profits, socialize losses", then you're just describing a properly functioning government. Going back to the initial point, what are governments supposed to do? Not build highways? Not have the police because that would "privatize profits" because private business no longer have to fund their own security?
        doctor_eval 3y ago
        > The whole point of government is to do things that benefit society as a whole, but aren't feasible to do on a for profit basis Err.. that’s a very unique definition, and certainly not one that’s universally accepted. > If that constitutes "privatize profits, socialize losses", then you're just describing a properly functioning government. One of the many roles of legitimate government is to protect the safety of citizens, aka voters. But corporations are incentivised to reduce costs. When these principles come into conflict, unfortunately the corporates tend to win (at least in the short term), at the expense of everyone else. A “properly functioning” government would balance these conflicts such that the cost of doing business was not socialised, for example by preventing companies from “cheating” by externalising costs that their competitors do not.
Firmwarrior 3y ago
Man, this type of stuff is so infuriating and so ubiquitous I wish every single person in the management chain over Don Sanders was in prison right now
- anigbrowl 3y ago
  This sort of thing nets more severe consequences in other parts of the world, and maybe they're on to something.
- kortilla 3y ago
  Including the shareholders? That type of knee jerk reaction kinda fails to any actual scrutiny because the minute prison is on the table, Don Sanders will no longer be reporting to anyone. He’ll just be an independent contractor paid for an assessment.
  - verve_rat 3y ago
    In NZ we have health and safety legislation that includes personal fines and prison time as options for officers of a company. It doesn't matter if the individuals involved are contractors, or volunteers, or the general public. The officers have a duty of care and if they breach it they can be personally liable. But on the other hand, I don't think I've heard of anyone going to jail for that sort of thing. Which either means we have no major health and safety problems (seems unlikely) or the courts are out of step with parliament, which does seem to happen a lot.
  - aperrien 3y ago
    Not punishing shareholders directly makes sense, at that level some sort of fine is probably best. But perhaps we should punish the board of directors for creating an environment where their subordinates need to look the other way when it comes to safety? They are the one who set the day to day policies and operations of the company. If enough of that happens, then maybe the board won't be as fast to push things without considering the consequences.
    - 3y ago
austin-cheney 3y ago
How? Software has the same problems. Usually the core of the problem is the perception that training costs too much and so problems from bad practice are encouraged until there is a class action lawsuit. I have seen this occur many times in my career whether it’s due to missing security, accessibility, or reporting.
- jabroni_salad 3y ago
  literally just put c-levels in jail until they figure it out, just like we do for fraud. Isn't the level of responsibility the reason for the high compensation?
  - austin-cheney 3y ago
    No, this is stupid. Blame the technicians who know better but intentionally disregard the necessary controls because they want to earn a bonus. Imagine if software developers could be individually sued for writing discriminatory, privacy violating, or insecure software. Then the fraud you speak of would naturally separate away from unintentional defects and software would be less defective overall. Then the C-levels are directly responsible when they tolerate their technicians committing the fraud you speak of.
Obscurity4340 3y ago
What I don't get is this obsession with making corporations people, except for the criminal part. Why can't a company be "thrown in jail" by cutting its heads off a jailing them. They want control but they don't want liabillity/responsibillity, they want rewards but no punishment, wins/gains but not losses. No matter what they do, they still win somehow and we continue this cultural narrative of meritocracy and equitable treatment under the law, but also unlimited campaign financing
- StressedDev 3y ago
  There is no obsession with making companies a legal person. It's done because it works, it's convenient, and it allows us to create giant organizations. The thing you have to think about is what does it mean when someone says a company is a legal person? It means a couple of things: - It allows companies to create contracts between themselves and real people. - It allows companies to own property (real estate, money, equipment, etc.) - It allows companies and individuals to sue other companies and individuals. - It protects companies from arbitrary or unjust government intervention. Companies also have another very good feature. Investors can limit their liability. For example, if I own 10 shares of a company and the company goes bankrupt, I am not liable for the company's debts. This good because it encourages people to invest, and it also protects people from being wiped out because of a bad investment. Note, companies are not the only legal person. Governments are also legal people. My question for you is how would you do things differently? What are the advantages of these changes?
  - Obscurity4340 3y ago
    I'm more concerned with their unequal treatment when it comes to the law vs ordinary people. There should not be parallel systems of punishment for corporations where they can receive any treatment not also available to the regular human defendant (with the same plain stipulations). I'm particularly concerned by their abillity to often "settle" criminal charges with a fine and no admission of wrong-doing. Who is actually allowed to pull that crap besides companies?
    - 3y ago

When the end result is fines that are absorbed as a cost of business, why would we expect anything different? It’s high time to hold the leaders of misbehaving companies to account.

SoftTalker 3y ago

Well also the derailments and accidents. That can't be cheap. Do they just convince themselves it won't happen?

passwordoops 3y ago
They convince themselves that with their market power, they'll be able to absorb the cost of any settlement... which has been the case for a while now
- Nevermark 3y ago
  Today, corporate leaders are fundamentally, and therefore rationally, aligned toward optimizing short term results. Their personal risk is short term profit shortfalls, while shareholders and the corporation as a whole carry the longer term risks. Even more misaligned, is the case of public companies. The shorter term someone holds shares, the more impact they have (buying & selling) on current share price, while demanding shorter term results. Without actual personal accountability from company leaders, criminal & civil, no amount of long term corporate risk, will change their rational response to incentives. There is a good reason that dynamic companies “over compensate” their leaders with eye watering stock grants. It isn’t well earned compensation. It is a tool to align interests, benefitting everyone. But for slower growing companies, that is too costly. So for all companies, liability protection for shareholders should be matched by liability acceptance not just from the corporation as a whole, but when it comes to malfeasance, individuals responsible for the malfeasance.
  - gruez 3y ago
    >but when it comes to malfeasance, individuals responsible for the malfeasance. How would that work? Individuals actors within corporations are already responsible for malfeasance. If you took it upon yourself to commit some crimes to boost your KPIs so you get a bigger bonus (eg. threatening employees with violence), being in a corporation isn't going to protect you. Even if you're the boss and you're telling your direct reports to commit crimes, that's still a crime.
    - Nevermark 3y ago
      Malfeasance in the regulatory violations and culpability for irresponsibility sense. Not just criminal. If the corporation is found culpable, or pleads no contest to culpability to reduce their fines or other repercussions, then executive, management or individual culpability would be determined (if any) by an outside party chosen by the board, acting in the interest of shareholders. Details, are not the point I am making, but that is one model. Whatever the process, it would be set in the corporate bylaws, and a minimum process required by stock exchanges to maintain listing. And possibly by law regarding corporate requirements - given law is what defines the balance of shareholder liability vs. corporate liability. This would add corporate employee liability to that balance.
      - gruez 3y ago
        >then executive, management or individual culpability would be determined (if any) by an outside party chosen by the board, acting in the interest of shareholders. What makes you think that "the big fish" will end up being punished, rather than the low level employees?
        Nevermark 3y ago
        The devil is always in the details. I can see this improving things simply because the possibility/process of accountability is likely to result in more responsible behavior from everyone. But I can see your point too.
taberiand 3y ago
They probably convince themselves they'll have moved on to something else before then, or otherwise get a hefty golden parachute when shtf and they bail out
wredue 3y ago
No silly. They just complain to the feds when it happens, and get a nice big fat day of “getting away Scott free” while tax payers foot the majority of the cleanup cost. The saying is “privatize profits, socialize losses” for a reason.
- gruez 3y ago
  >while tax payers foot the majority of the cleanup cost. source?
- kortilla 3y ago
  > The saying is “privatize profits, socialize losses” for a reason. It’s a saying because it’s a catchy socialist rallying cry, not because it has any relevance to the event in question.
  - hughesjj 3y ago
    It's also a saying because it's trueeee (See: Superfund sites, this event in question, climate change, highways and car based infrastructure, etc...)
    - gruez 3y ago
      >highways and car based infrastructure, etc...) If you follow this line of logic, it quickly gets absurd. The whole point of government is to do things that benefit society as a whole, but aren't feasible to do on a for profit basis (eg. roads, police, schools, etc.). Private companies and individuals are inevitably going to reap benefits as a result. If that constitutes "privatize profits, socialize losses", then you're just describing a properly functioning government. Going back to the initial point, what are governments supposed to do? Not build highways? Not have the police because that would "privatize profits" because private business no longer have to fund their own security?
      - doctor_eval 3y ago
        > The whole point of government is to do things that benefit society as a whole, but aren't feasible to do on a for profit basis Err.. that’s a very unique definition, and certainly not one that’s universally accepted. > If that constitutes "privatize profits, socialize losses", then you're just describing a properly functioning government. One of the many roles of legitimate government is to protect the safety of citizens, aka voters. But corporations are incentivised to reduce costs. When these principles come into conflict, unfortunately the corporates tend to win (at least in the short term), at the expense of everyone else. A “properly functioning” government would balance these conflicts such that the cost of doing business was not socialised, for example by preventing companies from “cheating” by externalising costs that their competitors do not.

Firmwarrior 3y ago

Man, this type of stuff is so infuriating and so ubiquitous I wish every single person in the management chain over Don Sanders was in prison right now

anigbrowl 3y ago
This sort of thing nets more severe consequences in other parts of the world, and maybe they're on to something.
kortilla 3y ago
Including the shareholders? That type of knee jerk reaction kinda fails to any actual scrutiny because the minute prison is on the table, Don Sanders will no longer be reporting to anyone. He’ll just be an independent contractor paid for an assessment.
- verve_rat 3y ago
  In NZ we have health and safety legislation that includes personal fines and prison time as options for officers of a company. It doesn't matter if the individuals involved are contractors, or volunteers, or the general public. The officers have a duty of care and if they breach it they can be personally liable. But on the other hand, I don't think I've heard of anyone going to jail for that sort of thing. Which either means we have no major health and safety problems (seems unlikely) or the courts are out of step with parliament, which does seem to happen a lot.
- aperrien 3y ago
  Not punishing shareholders directly makes sense, at that level some sort of fine is probably best. But perhaps we should punish the board of directors for creating an environment where their subordinates need to look the other way when it comes to safety? They are the one who set the day to day policies and operations of the company. If enough of that happens, then maybe the board won't be as fast to push things without considering the consequences.
  - 3y ago

austin-cheney 3y ago

How? Software has the same problems. Usually the core of the problem is the perception that training costs too much and so problems from bad practice are encouraged until there is a class action lawsuit. I have seen this occur many times in my career whether it’s due to missing security, accessibility, or reporting.

jabroni_salad 3y ago
literally just put c-levels in jail until they figure it out, just like we do for fraud. Isn't the level of responsibility the reason for the high compensation?
- austin-cheney 3y ago
  No, this is stupid. Blame the technicians who know better but intentionally disregard the necessary controls because they want to earn a bonus. Imagine if software developers could be individually sued for writing discriminatory, privacy violating, or insecure software. Then the fraud you speak of would naturally separate away from unintentional defects and software would be less defective overall. Then the C-levels are directly responsible when they tolerate their technicians committing the fraud you speak of.

Obscurity4340 3y ago

What I don't get is this obsession with making corporations people, except for the criminal part. Why can't a company be "thrown in jail" by cutting its heads off a jailing them. They want control but they don't want liabillity/responsibillity, they want rewards but no punishment, wins/gains but not losses. No matter what they do, they still win somehow and we continue this cultural narrative of meritocracy and equitable treatment under the law, but also unlimited campaign financing

StressedDev 3y ago
There is no obsession with making companies a legal person. It's done because it works, it's convenient, and it allows us to create giant organizations. The thing you have to think about is what does it mean when someone says a company is a legal person? It means a couple of things: - It allows companies to create contracts between themselves and real people. - It allows companies to own property (real estate, money, equipment, etc.) - It allows companies and individuals to sue other companies and individuals. - It protects companies from arbitrary or unjust government intervention. Companies also have another very good feature. Investors can limit their liability. For example, if I own 10 shares of a company and the company goes bankrupt, I am not liable for the company's debts. This good because it encourages people to invest, and it also protects people from being wiped out because of a bad investment. Note, companies are not the only legal person. Governments are also legal people. My question for you is how would you do things differently? What are the advantages of these changes?
- Obscurity4340 3y ago
  I'm more concerned with their unequal treatment when it comes to the law vs ordinary people. There should not be parallel systems of punishment for corporations where they can receive any treatment not also available to the regular human defendant (with the same plain stipulations). I'm particularly concerned by their abillity to often "settle" criminal charges with a fine and no admission of wrong-doing. Who is actually allowed to pull that crap besides companies?
  - 3y ago