Much has been written and said recently about an apparent lack of ethics in many segments of our society – in particular our politicians, political appointees and corporate executives. As the political side of this issue is well discussed in the forthcoming issue of Money Magazine, I am going to visit corporate ethics here.
I think the first issue is to answer the question – is there such a concept as “corporate ethics”? I have thought about this a great deal and have come to the conclusion that no – there is no such thing. Corporations don’t think as entities – they merely reflect the ethical values and personal principles of the decision-makers – whether that is a single person in a small company or an entire Board of Directors or members of the so-called “C-suite” for larger national and international businesses.
I find the notion of corporate ethics and responsibility inextricably linked back to those same issues on a personal level for the individuals involved. A corporation doesn’t decide to do anything – the people that control the corporation make the decisions and they should be the ones that pay the price.
Public censure, fines and other forms of discipline assessed against companies only penalise consumers, employees, and in some cases, shareholders. These approaches are punitive and don’t change the fundamental behaviours, beliefs and attitudes of the decision-makers that are involved.
As a result of some financial imprudence (you can provide your own personal interpretation of that statement) in the mid-to late 2000s, some companies were labelled as “too big to fail” and the executives who caused the problems labelled as “too big to jail”. What nonsense – particularly the second part about jailing those responsible for the most egregious acts.
The negotiated settlements see some people parting with, what appears to be large amounts of money – the reality is something very different, unfortunately. Yes they part with some millions but those millions pale into ignominity in consideration of the deliterious effcts of the actions on businesses, consumers, employees and unsuspecting investors. These people deserve nothing less than being stripped of 100% of their ill-gotten gains (both cash and assets), jailed for terms involving double-digits (with no early parole and no “Club Fed”-style prisons) and a permanent world-wide ban on further business activities other than as a consumer.
Harsh? YES. Too harsh? You can judge. What I do know is these people with their suspended or nominal sentences are not being dealt with in an appropriate manner and the “punishment” is certainly not a deterrant.