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You end up punishing the wrong people, i.e. you punish people who might have unknowingly gained from this, but did not cause it. You also end up punishing ordi
by ars 3y ago
You end up punishing the wrong people, i.e. you punish people who might have unknowingly gained from this, but did not cause it.
You also end up punishing ordinary people who did nothing wrong.
A better punishment is putting the company under receivership whose goal is reforming the behavior of the company.
If you can identify the right people you can fire them, but it's not always possible: The manager pressures the employees to deliver better results, the employee cheats "a little", and doesn't tell the manager that that's how he got results.
In that scenario who is responsible? The manager will say "I didn't tell him to cheat, and I didn't know he did it", the employee will say "it's not my fault, the manager set such expectations that he forced me to cheat".
There's no clear answer, so instead focus on reforming the culture.
- colechristensen 3y agoPunish the investors by forcing them to price the risk of enforcement by having enforcement apply meaningful financial punishment. On the flip side this rewards well behaving competition giving a real market advantage. For FAANG this means fines need to be on the order of $100B for something significant. You might have to do this once or twice but once the risk is real investors will put appropriate pressure on boards, and influential employees paid in stock will have personal motivation.
- ars 3y agoThat won't work because the investors that actually have influence with the board also know exactly the right time to jump ship before slow moving regulators manage to do anything. You are again punishing exactly the wrong people.