Corporate fines shield executives from personal accountability when treated as business costs

Evidence

Responsibility is restored by consequences for culpable behavior. The market system malfunctioned because wrongdoers were shielded from the consequences of their detrimental actions. Instead, the public bore the costs of their faulty practices. Many such situations involve high-ranking officials, who command influence and power, which they use to shape protective self-policies and to craft settlements for harmful practices that guard them from legal penalties. For example, faceless companies are fined for corporate transgressions, but their chief executives are neither charged nor penalized nor even required to admit wrongdoing. It is difficult to reform transgressing organizations when they are considered agentless entities and allowed to treat fines as business tax write-offs. Although some progress has been made in getting transgressing corporations at least to admit wrongdoing, consequences need to be tied to individual executive wrongdoers, and corporations should not be allowed to treat financial penalties as tax benefits. — Albert Bandura, Moral Disengagement, 2977

Categorization

• XREF: Connects to the agentless-company idea and to ongoing debates over corporate personhood and deferred-prosecution agreements. — connects to: Corporate performance pressure causes labor violations that companies then externalize as managerial fault — Max Haiven, Cultures of Financialization, 291