How Do You Clean up the Corrupt Nature of Big Business Where No One Goes to Jail?
There is breaking the law and then there is dishonesty through sales practices and misleading marketing. A recent article posed this question about the bad actors during the financial crisis in 2008 where investors lost billions upon billions of dollars.
"Five years after Lehman fell, taking the global economy along with it, a roll call of Wall Street CEOs serving time for their role in the crisis looks something like this:
So, yeah. Zero Wall Street CEOs are in jail. But we did promise you a list:
1. No one.
3. Wall Street's lawyers are amazing.
4. Etc. Etc.
It's not that federal government tried to prosecute a bunch of them but lost the cases. There were no serious efforts at criminal prosecutions at all."
The article couldn't come up with any big names. Sure there were the ones who were fraudsters who went to jail. Yet, none of the others who ran questionable/unethical/misleading sales practices saw any jail time. I get that. If you didn't break the law, you shouldn't serve time. However, what about if you ripped people off or you were over a business that ripped people off? Doesn't the buck stop somewhere? After all, that is why they get paid CEO money.
Truth be told, there are no consequences. Sure they can get fired. Yet, the parachute out rich individuals which removes the consequences of job loss. Any consequences that do come about are easily swept under the rug by attorneys or a company is forced to pay fines which amount to a small percentage of profits.
So, it is pretty simple. One of the responsibilities of a CEO is managing a company based on ethical business practices based on doing right by his/her customers. In order to do so, they are involved to the point that they oversee the hiring of effective managers that they themselves can manage and they are in tune with what is going on. They are excellent managers of red flags. They can spot them a mile away. If the CEO as well as his executive management team had the ultimate consequences of unethical behavior, wouldn't they run a tighter ship? Wouldn't a culture of honesty and "do the right thing" be the #1 objective?
Ultimate consequences shouldn't be jail time unless laws were broken. However, if it meant that unethical acts could personally wipe out a CEO's fortune? I think we could start to see some constructive changes. Take Wells Fargo for example - If the regulators went after the personal fortune of the CEO and executive team first, wouldn't that be the ultimate consequence?
Who sets these standards and regulations? Well, the problem always seems to come back to the politicians. It is no wonder there are no consequences for unethical behavior.