> The CEO can't know what every last person in the organization is doing, but they should be incented to make it their business to a culture in place that doesn't permit this
Where I'm from, there's a group af crimes such that if an employee at a company does them, the CEO will absolutely go to jail, even if they knew about it or not. For example, if your company produces toxic sludge as a byproduct, and someone at the company dumps it in nature instead of properly taking care of it, it's jailtime.
Unsurprisingly, compliance with some environmental protection laws are A+ at all companies. Personal liability works fantastically as a motivator for companies.
> For example, if your company produces toxic sludge as a byproduct, and someone at the company dumps it in nature instead of properly taking care of it, it's jailtime.
That's a kind of criminal collective responsibility, which I find repugnant whether it's a mother in Palestine being held criminally responsible for her son suicide bomber, or it's a CEO being held criminally responsible for the wrongdoings of some low-level employee that they did not direct and were even unaware of.
Personal liability is arguably OK here, but criminal liability like you describe ("goes to jail") is most certainly not, and I'm surprised that there are so-called enlightened legal jurisdictions that do this.
Strict liability is an old concept in law. I am not buying these claims of innocence involving a low level employee whose activities were not directed by the CEO; this fraud involved thousands of employees responding directly to a clear economic incentive that came down from the executive suite. You don't get to bring about that sort of situation and then disavow any knowledge of it. That's just an invitation to malfeasance. Look up the legal concept of Scienter - someone who knows or who should have known that fraud was taking place shares in the liability. I'm pretty sure the CEO of of a massive bank like Wells Fargo understands that sufficiently tempting/frightening economic incentives are going to drive employee behavior, just as they do consumer behavior.
I'm actually inclined to agree with you re: Wells Fargo. But in general, I think the bar should be very high. If a single employee dumps toxic waste despite clear regulations otherwise, and a history of company enforcement, then I would very much oppose any type of criminal penalty against the CEO.
And just because something is an old concept in law doesn't mean it's right or moral.
I'm honestly morally conflicted here. I reflexively agree with you. However, true justice doesn't exist. Our legal system exists for social and economic stability, not for seeking justice.
(Semi-rantThe American justice system has Libra wearing a blindfold. The blindfold represents objectivity, in that justice is or should be meted out objectively, without fear or favour, regardless of money, wealth, fame, power, or identity. At its core, it's unjust. I've personally experienced it. As an engineer, I have a decent amount of wealth. Because of that, (and after doing lots of research), I was able to hire a well-renowned attorney who had my case dismissed. It wasn't necessarily the barrister's legal ability, it was his personal relationships with the court and specifically the DA.
There were a number of cases before mine. Many either had the defendant representing themselves or represented by a public defender. A number of them received harsh sentences for allegations that weren't as serious as I faced. All of them took the plea deal(which is itself unjust. It effectively punishes you for seeking a trial by jury) because they simply could not afford decent legal representation. The public defender had a stack of manila folders up to his eyeballs. It was obvious he didn't have the resources to mount an effective defense.
I guess it makes sense in a capitalist country that you get the justice you pay for. But I came to accept that it's not about justice. The only reason Madoff had the book thrown at him is because he ripped off a lot of rich and powerful people. Maybe if Stumpf were railroaded into a max federal prison, it would serve as an effective deterrence...unjust for him, but for the greater good of society.
> Our legal system exists for social and economic stability
> [your description of a horribly unjust legal system as you experienced it]
You really think the system you described is good for social stability? People aren't stupid, the ones who got the raw end of the deal noticed the same injustice you did.
I thought they only have to demonstrate that they took reasonable measures (training, checks and balances, culture, etc.) to prevent an employee from doing something like that. Being a CEO without that protection would be scary.
That's super interesting to hear. Can you provide any links to good articles on the topic? This type is reform is something that I think would improve the banking system.
In theory, this keeps CEOs from pleading ignorance as an excuse.
Where I'm from, there's a group af crimes such that if an employee at a company does them, the CEO will absolutely go to jail, even if they knew about it or not. For example, if your company produces toxic sludge as a byproduct, and someone at the company dumps it in nature instead of properly taking care of it, it's jailtime.
Unsurprisingly, compliance with some environmental protection laws are A+ at all companies. Personal liability works fantastically as a motivator for companies.