Our governmental methods of punishment for corporations strike me as lacking. This seems similar to Wells Fargo, where ok, the company was fined, sued, made to pay restitution (somewhat) to victims. But underlying it all, the culture and incentives at the company that produced the situation didn't get fundamentally changed. Which often perpetuates across specific leaders, boards, and is a part of what a company is -- and doesn't just get replaced by removing one or two people.
What does it take? You have to dismantle a company before it changes these kinds of deep-rooted issues? Or can a government penalty call for that? That is hard to achieve. Who's going to change the evaluation procedures that HR has in place to measure what rating or bonus you get this year? That seems to me as important as who is CEO.
None of the penalties courts mete out (short of dissolution/fined into bankruptcy) seem to be able to achieve this level of change needed.
The problem is that finding the people responsible can be extremely hard, so you have to go against the corporation itself.
Punishing a corporation is easy, but the government hates doing it for obvious reasons. It means ruining something which is useful to you and punishing tens of thousands of completely innocent people, with inevitable layoffs.
What Boeing really needs is a complete change in management culture, as that was the real root cause for the MAX disasters, but that is impossible to enforce, you can't even really verify that it has happened.
I also think people don't understand how extremely lucky Boeing is. If all of this had happened during a time of low demand the company would be facing a far more dire situation, likely with many major airlines canceling orders. But since airplane demand is very high and order books are full, airlines have to keep their orders at Boeing if they want new planes.
Who is ultimately responsible for management at a company though? The CEO and the other C-level people. This isn't really the daunting difficult problem you make it out to be: the buck stops at the C-suite. Who else could possibly be ultimately responsible??
You can not punish someone for a crime they didn't commit and had no knowledge of. That is ridiculous and a perversion of justice.
There were two crashes. After the first crash Boeing were quite happy to pin the blame on the Lion Air pilots. At that point the C suite were definitely involved in every decision.
Exactly this. The first crash was negligent design of a technical system. The second crash was murder.
The regulators are also culpable since the design of the system was in the public domain before the second crash and they did nothing about it.
No civilised justice system in the world is getting to murder from these facts.
Manslaughter via negligence if you're feeling really lucky
Depends on if it could be shown that the decision to not ground was motivated by a desire for profit or not.
Still not murder unless they intended for the deaths to occur.
Is whatever Boeing did a "dangerous felony"? Wikipedia suggests not every crime qualifies:
Knowingly placing thousands of lives at risk, including possible state actors - risking international relationships, whilst also risking damages to critical infrastructure, such as airports, certainly would seem to qualify as a dangerous felony.
The legal system doesn't operate on "seem".
If they can do it to Trump, they can do it to Boeing.
Trump wasn't prosecuted for felony murder, he was prosecuted for a misdemeanor which was upgraded to a felony because it was used to violate campaign finance laws.
There are different degrees of murder. First degree requires you to plan in advance kill someone (either particular person or a specific group). Second degree murder doesn't require the plan to kill, and so negligence for financial gain COULD be second degree murder depending on the details. (Boeing knew or should have known that their mistakes could lead to death and so mitigated this)
Note that US states are not consistent on what is second degree murder. I cannot find a federal definition (I'm not a lawyer - this should be seen as me not knowing the right search terms). There are many other countries with their own definitions of murder which are all slightly different.
Felony murder statutes disagree.
And the level of risk the CEO/C Suite would have to take on would be insane. Who would want to be in charge of an aerospace company if there was a real risk that you'd get charged with murder if you don't have an almost psychic insight into the technical decisions of your company?
There'd be a filtering effect where the best and brightest avoid industries where we need them to be. That standard would likely reduce the quality of the leadership and bias it further towards people who are delusional about safety.
Why, again, are the c suite being paid as much as they do if not to take on this risk?
To fullfill their role? Management and making decisions? Taking on personal risk has never been a part of the C suite beyond the tradition of giving them shares as part of their compensation.
Shareholders use positive incentives, not negative ones. Because positive incentives generally lead to better results in this case.
Seems like the US has some really weird rules in this regard then. For the C-suite to take on personal risk is literally a part of the role where I live. the central business registry register those holding these roles for that exact reason.
In this case they've clearly done the opposite.
You seem to be arguing that the C-suite can do anything it wants to. As long as it does it in an official capacity, it can cause whatever harm it wants.
That seems like a very strange argument. Do you believe corporations and corporate officers have no moral obligation to act ethically?
Because if so, I'm finding it hard to understand the difference between a corporation and a crime family.
We need them energetic and vigorous! /s
You say this like it's crazy, but we literally already do this with Doctors and Surgeons, it's not as tricky as you make it sound.
There's no valid reason that CEO/C-Suite folks get to forever escape any responsibility and accountability.
Citation needed + dubious analogy
If what Boeing management has to offer means "quality" then I'll gladly take less of it, thank you. Same with VW and all those managers which went away unscathed enjoying their golden parachutes, for basically leading schemes for killing people.
Gee, maybe we’d get people who are knowledgeable and care about engineering rigor, instead of MBAs whose sole goal is to make the share price go up.
Sounds good to me. We'd end up with aerospace companies run by engineers who understand the technical decisions in detail, instead of MBAs and accountants.
Will that make the best and brightest avoid it, or the worst, cheatingest, and laziest?
If the ship's captain was asleep in a drunken stupor while the 17 year old helmsman crashed the ship into an iceberg, should the captain go unpunished?
I feel that punishing sobriety and rewarding drunkenness is probably not a good idea, if we want to avoid our ships hitting icebergs.
Bad analogies won't help anyone. Did the CEO believe his people were incompetent to develop and verify the software?
Did the CEO create the culture in which they could not despite being able to?
IIUC the decisions that led to the 737 Max happened under the prior CEO Muilenburg. Calhoun is just the fall guy. He wasn’t even CEO when the crashes happened.
He should bear responsibility for the door plugs, though.
Your question is also far from the mark.
Plenty of people have to respect a much higher standard of accountability: did the CEO take actions to ensure that proper adherence to industry standard was respected? Which processes were put in place to ascertain the continued respect of these standards?
In many jobs, incompetence will get you in jail. Sure, sometimes your reports go out of their way to conceal issues, but aside from extreme cases, a CEO should have to show what they did to prevent issues, and merely "believing" should land them in jail.
Analogies don't have to be perfect unless you don't want see inconvenient arguments. Boeing CEO(s) shot hundreds of people in the head and then claimed they had no idea the gun was loaded and the safety was off. "My assistants said it's fine to point and shoot".
It's not about the result or what the CEO "believes", it's about what they reasonably did to avoid bad outcomes. Did the CEO do anything to be certain his people are competent, or that an incompetent person cannot tank the quality of the product? Did they take any reasonable measures, implemented checks, ordered audits, spent more to prioritized safety and quality?
The CEO has the highest executive authority and the highest pay. This means the highest level of accountability. Until the shit hits the fan, or the ground, and then the employees were incompetent, the processes were weak, the consultants that weren't picked by the CEO said it's all good.
The reason they get away with this isn't that the law protects them, it's that they fill pockets and buy laws to protect them. Random "Empty Pockets" Joe won't get a pass for building something that kills people because they didn't bother to verify anything.
A vessel's master will always leave standing orders to be followed while they're asleep. Typically these orders solve only some routine choices that were anticipated, and for anything extraordinary the master should be awoken at once and consulted.
The junior watch officer should have summoned the master long before the ship hit an iceberg, if they are inattentive (e.g. they fall asleep in the warm dark of a bridge at night) the BNWAS will alarm to try to wake them, then eventually summon senior officers (typically the master, but maybe also a chief engineer and others) to the bridge. The master is responsible for ensuring the BNWAS is operable.
It would be extremely unusual for a commercial vessel (not to mention military vessel) to allow officers to drink booze, especially enough booze to fall "asleep in a drunken stupor". Of course just because something is prohibited doesn't mean it won't happen, but now we're talking about culpability and of course you're culpable if as a foreseeable consequence of your prohibited actions bad things happen, that's negligence at best.
I can’t believe I’m reading comments from people who think leadership comes without responsibility I can only assume it’s someone being defensive.
If it really is your philosophy then who is to blame?
I can’t believe I’m reading comments from people who think leadership comes without responsibility I can only assume it’s someone being defensive
No. But also, this is not the situation.
There should be a second/third in command on duty when the captain is drinking or sleeping. (and the captain should be off duty long enough for whatever he was drinking to wear off - my understanding in ships often run 4 hour shifts so there may not be enough time but sometimes the second will take a longer shift to allow the captain time to celebrate.)
Of course no good captain would leave the ship in control of a new second in command in hard conditions. However sometimes the second in command would be captain years ago if there was need for a captain but there isn't, and then there is flexibility.
It seems to me the real perversion of justice is executives constantly avoiding consequences for their actions
It is not illegal to be a bad CEO.
CEOs, surprisingly are protected by the law as well.
If you are such a bad CEO that over 200 People die because of your bad management, then that should definitely be illegal. For what do they get the millions if not for taking responsibility?
LOL To these guys, “taking responsibility” means simply making a sad face and issuing a press release saying “we’re sorry.”[1]. Not actually taking responsibility and going to prison.
1: https://youtu.be/15HTd4Um1m4
Maybe in some cases it should be?
It is in some cases.
It is illegal to be a bad engineer or a doctor, in certain cases. Why not CEO?
So you want to argue that it was not criminal fraud but blatant incompetence? Interesting angle of defense, but I wouldn't give it a high chance of success.
Prime counterexample: Sarbanes-Oxley. Yes, you can punish people for failing to comply with legal obligations, even if they had no specific knowledge of the obligation not being met.
Ignorance of the law has never been an excuse. You are expected to know all the laws that apply to you.
The law being so wide ranging, complicated, and subject to interpretation based on previous decisions (in may jurisdictions) it's practically impossible to know definitively every law that applies to you, even for an expert.
Now, knowing what the law is in specific, narrow areas that you're operating in, or with sufficient budget to hire experts, that's something different, and might be closer to knowable.
I fully agree with you, but that doesn't change anything about my statement. Even if you don't know what the law is you are still responsible for following it correctly.
In the legal culture I'm familiar with, the CEO and the board of directors can be held liable for everything the company does. If they are not aware of the crime but they should have been, it can be seen as gross negligence.
As far as I understand, the legal theory is that the CEO and the directors are organs of the company rather than natural persons when acting in their roles. Therefore some of the usual legal protections do not apply. Assigning liability like that is an inherent part of the social trade-off that allows limited liability companies to exist.
You are all arguing irrelevant points. Because the premise is false.
You can identify the people responsible. I won't bother to explain it all, but at very step of the manufacturing process different workers signed off on the integrity of their work. All of that paperwork was logged with the US government. If you let me peruse those papers I could tell you who designed each and every component of the landing gear, and which workers assembled that landing gear on each and every MAX out there. I can tell you which executives signed off on it, and if you subpoena the documents I could even tell you what they were all emailing back and forth. More importantly, I can tell you which QA engineers and executives were involved in the QA and testing process for that landing gear and give you the results of the tests they ran. So on and so forth, all the way up to the CEO.
We can identify people. We've simply decided that we won't. You guys are arguing an orthogonal point as to whether or not to hold C level executives accountable. I can tell you right now you're going to effect much better change if you target key executives at the director-VP level than if you target C level people.
We do need to get rid of the rats. And a lot of those are C level executives, but it's important right now to get rid of all the rats. And right now, many of those rats are being promoted.
There's a very simple legal phrase which is "knew or should have known" - the CEO knew or should have known. It's that simple.
If you are the CEO and you did not, you should have, and you are responsible. It doesn't really need to be more complicated to incentivize rooting out evil - if we hold people responsible authorities (those with power) who should have known, they will figure out a way to increase integrity of their organizations instead of spreading accountability through infinity vendors.
The CEO is accountable for culture and hiring, good or bad. If someone below them hired poorly, the CEO failed by hiring a poor hiring manager. As the poster above said, the buck stops at the top.
If some random person on the floor didn't properly log a maintenance activity, that is the CEO's fault for not creating a culture in which proper documentation is properly stressed. Again, the buck stops at the top.
That person on the floor must be, and usually is, indemnified, because it's more important to get open and honest feedback from them on what happened. That way we know the changes the CEO failed to implement to prevent it from happening, and should now implement to prevent it from happening again. This is because the buck stops at the top.
What about a crime that was in their job description to have knowledge of? Would a doctor not be liable if he didn't properly diagnose a patient? There is an assumption of minimal professional competency when you assume the responsibility of that role.
Doctors are definitely not liable for misdiagnoses.
I'm pretty sure that you can sue for malpractice should the misdiagnosis fall below a minimum standard of conduct. In practice, misdiagnosis is not easy to prove, but we're talking Boeing executive level of incompetence here.
Parents can absolutely be responsible (at least financially) for crimes that a minor child under their care did. Doesn't matter if they weren't around at the time and told them not to do it.
Besides, Understaffed/Poorly staffed orgs tend to have more issues like this anyway... which tends to be the result of executive decisions, right?
Being too insulated from day to day ops is a symptom, not an excuse.
Does management get to enjoy profits/bonuses when things are going good, if yes then why can they share the pain as well?
Yes you can, it's called Strict Liability. That's the risk they're getting payed billions of dollars to make sure they get right. It's their job to have the knowledge and make sure it doesn't get committed.
A the time honored excuse of "sorry mister officer I did not know the car I was driving was stolen, I just found it on the road a few days ago and had no idea I swear".
No its called a healthy society. The reason - There is usually surprisingly little actual skill gap between good seasoned (higher) middle managers and c-suite. What gets you up there is politics, clever sociopathic games, tenacity, connections, and often a bit of luck. If you look for words like additional competence among that list, you wouldn't find it.
The only reasons some folks push up there to the top are 2 - power, and money. They receive extra money because they are holding massive responsibility for their part or whole corporation. Lets stop finding reasons why there is actually 0 real responsibility on them. Its literally part of the deal they sign up for, and they know it very well.
Yes, it may sometimes mean that they get the heat for something caused by their predecessors, its part of the risk they take on themselves by pushing into such role. Its still firmly their failure, ie to a) identify it; b) act upon it. But as we see this wasn't a priority in Boeing, and I presume it still isn't.
They did commit it by accepting their role, their responsibility for their team, the higher salary for the higher responsibility and the dereliction of their duties.
You are the one person on the planet (I hope) who believes a leader is not responsible for those under his leadership.
Before you take offence understand this is just a difference of opinion of what a leader is, nothing against you personally.
We should certainly do something about CEOs being in charge of large multi-billion dollar companies, rarely having direct consequences, and still being rich. It is currently reasonable that a CEO might not know everything when something happens the first time in a huge company. We shouldn't have only one person responsible, but likely a group. This is more important in safety critical industries, but less so for something like a luxury goods company, so you wouldn't want to force every company to this structure.
This is currently an advantageous single point-of-failure for companies and CEOs, and the advantage grows the more safety critical the industry that they're in. The company structure prevents any real responsibility except when the crime is blatant (like the CEO was recorded or wrote down something).
CEOs get paid massive amounts for supposedly being responsible for the company. So why shouldn't they be held responsible for the company?
Part of the reason the C suite makes outrageous salaries is that they have much more responsibility than the rest of us. They didn't have the intention to harm people but it's nonetheless their fault if they didn't put in place proper and reasonable procedures to prevent the problems.
Who didn't have any knowledge of what, here? Are you saying the CEO of Boeing had no idea what was going on with the 737 MAX program?
Why not? It happens all the time, to various degrees of "punish", especially in civil cases.
You are responsible for your property (land) and can be sued quite successfully for issues you had no knowledge of and no way of knowing.
If you incentivize ignorance, then that’s what you get more of. If all I have to do to avoid responsibility is to cover my eyes and plug my ears after I chuck the figurative grenade into the operation, then then expect me to develop an enthusiastic case of “la la la I can’t hear you!” even in reaction to normal decisions, just in case.
It feels like maybe the financial industry made some reforms along these lines, right? Where they established that somebody specific in an executive position was required to sign personally guaranteeing that various financial filings were not fraudulent?
Presumably that personal risk incentivized said executive staff to want to know more rather than less, and the residual risk (of having to stand by your word) became priced into the pay packages.
Well, ultimately responsible are the shareholders who demand ever higher profits, and the top management has to deliver that, even if it hurts the company long term; or, to generalize even more, capitalism.
That's not how this works. The shareholders don't have direct authority over the decisions made by the company's chief officers. They can demand "higher profits" all day long, but that doesn't absolve the board of directors or management from their responsibility, and it doesn't give them a blank check to behave unethically or even criminally.
Ugh, that is such a knee-jerk, fallacious take. Short-sightedness and misalignment of incentives are traits that are hardly specific to capitalism.
A problem doesn’t need to be specific to capitalism in order to be caused by it. Of course this is all a result (a predictable one) of a certain type of capitalist theory, namely extreme shareholder primacy.
Boards run corporations on behalf of investors through vague and soft guidance so as not to directly be considered officers
CEOs are appointed based on their ability to do what the board wants while shielding the board - this is why they get paid the most
Until investors and the board significantly hurt, to the point where their investment is either a total loss, or they are liable for additional financial inputs then nothing will change
Ok but are you arguing for or against holding CEOs liable?
If that big CEO paycheck came with some actual risks if you ignored ethics then maybe there would be fewer CEOs willing to do that.
I’m saying that its all a ruse
Boards want the media to focus on the CEO because they are literally there to shield the board from accountability while “taking the brunt” of the bad PR - and also being a show piece for the company in good times
So, the real answer IMO is to change the law to implicate board members and investors directly as though they are officers equivalent with the CEO is setting corporate direction and incentives
Of course they have intentionally made the law such that any actions taken by the corporation, limit the liability of the board legally, while not taking the power away from the board to drive the direction and priorities and incentives of the corporation
The whole thing is an accountability shell game - Wherein a CEO is the whipping boy for whatever the board needs them to be the whipping boy for - and there’s a balance and ownership
The simplest way to put it is that the CEO is there to ensure that everything, the company does benefits investors primarily.
Until it is legally the case that corporate leadership must prioritize the benefits to labor above investors, nothing functionally is going to change.
The board is responsible for keeping the C suite honest. They need to be removed.
The board and the c-suite of Boeing should be replaced, and they should personally have to pay life changing fines and serve jail time.
Technically the board is ultimately responsible for management. It’s the board’s responsibiity to hire delegates and to monitor their performance.
That’s how it’s supposed to work, but it seems to me it’s been a very long time since board have been anything other than rubber stamps for the CEO.
Yes the Captain of a Ship is always responsible for everything that happens on his ship 100%.
Make the CEO responsible, want those big rewards (high ceo pay) get ready to deal with big responsibility. I’m sure if CEOs were criminally liable things would change very quickly.
The criminal precedent of punishing a person for a crime they didn't commit and had no knowledge of is so bad that I honestly didn't think any reasonable person could come up with this.
There were two crashes. The CEO most certainly should have known about the problems after the first one.
It’s the CEO’s job to ensure that sufficient measures are in place to prevent failure. They should not be punished for accidents; they should be punished if the accidents were reasonably predictable.
Which was most certainly the case when they decided to the redundant AoA sensor an optional extra.
Possibly, but not if it were a one-off. Are the airlines that chose to keep flying Boeing 737 MAX not equally (or more) responsible?
After the first accident, Boeing was said to be blaming the pilots, in private, despite knowing about MCAS but not revealing it. They deliberately misrepresented the design (and in particular they minimised the severity of the failure modes) of MCAS to the FAA during the certification process. There are transcripts of the test pilots discussing this stuff. Boeing also heavily lobbied the FAA not to ground the Max 8 despite other jurisdictions grounding the aircraft.
There is plenty of evidence to suggest that Boeing knew what was going on, and if the CEO didn’t know then he wasn’t doing his job.
There really is no reason to give them the benefit of the doubt.
What amazes me is that the first crash is arguably "pilot error compounded by MCAS" but they didn't just immediately pay the tens of millions it would have cost to retrofit all existing planes with the double-sensors that were an option but not required.
Then drag him to court for that. But this is totally different to charging him with the crimes of other people he couldn't have known about.
What are you talking about?
From [1] in 2021:
He’s not being held responsible for the crime, he’s being held responsible for looking the other way.
The CEO is 100% responsible for designing programs to ensure that the business operates within the parameters of the law.
What else do you think their job is?
[1] https://www.cnbc.com/2021/01/07/doj-fines-boeing-over-2point...
There is immense precedent to punish a person for a crime they were responsible for and that they should have known was happening.
The software issues definitely were not something the CEO should have known about.
The CEO has the responsibility to make the company work well. If a company build products that injure or kill people, the CEO should be in trouble too. Instead of looking the other way and still get big paychecks and bonuses, improve design, testing, all company processes and make the company build products that work.
In cases like this it should be even harsher than a prison or monetary punishment, I like what China is doing by executing White collar criminals such as CEO's for negligence, fraud, causing death etc:
https://www.businessinsider.com/chinese-white-collar-crimina...
Yeah, this is key. I don't see why the system shouldn't be set up that way. Company does something criminal, now boss is considered a criminal.
That is a perversion of justice. You can not transfer criminal liability for money.
Your employees can be criminals regardless of culture. The precedent this would set is ridiculous.
Who should be responsible for a company's crimes if not the people who make decisions in the company? If we want companies to have legal personhood, how about they suffer the same perils of breaking the law (prison time, etc)? Fines are just a price we set on breaking the law.
The person committing that crime.
Companies can not be put to jail.
The people committing the crime include those who make the decisions. Hiring an assassin makes me guilty of murder.
I'm almost certain that's not true (at least, not in my own jurisdiction). Conspiracy to commit murder, perhaps. "Murder for hire" is apparently the DoJ term (https://www.justice.gov/usao-ndca/pr/murder-hire-convict-sen...).
But that's not the situation here anyway. Is an architect guilty of murder if a building he designs collapses? Flaws in his design may have contributed. What about the construction company that built it? Perhaps they were incompetent and sloppy in their construction. The suppliers might be at fault as well; they could have sold inferior steel or concrete. What about the politicians that passed faulty legislation for building codes? Does some of the blame not fall on them too? Or the maintenance company that skimped on their maintenance checks and could possibly have seen the cracks forming?
There is very rarely, despite the assurances of five-whys and other incident response practices, a clear-cut and obvious point of failure when complex systems break. The Boeing situation was a failure of culture, people say. Maybe. They justify criminal charges on the C-suite as a result. Maybe even that is just, for a certain definition of justice. But the buck doesn't have to stop there. Where are the criminal charges for the shareholders, who chose to keep these criminals at the head of the company? Where are the charges against the FAA, who continued to do leave Boeing to be its own regulator? Why not cast blame on the previous CEOs as well? After all, culture takes a long time to change, and the current CEO has only been in the role since 2020 - the MAX's first flight was in 2016!
The people in charge have to ensure that the right measures are in place to prevent illegal behavior. If they do not do that, then they are liable. At Boeing, effective measures are obviously not in place.
1) It's the CEOs job to know. Carelessness, recklessness, wilful ignorance, malice, these are all terms of art and can lead to different liabilities; as a non-lawyer I don't trust my own understanding as to the exact boundaries between them.
2) If the CEO knows, then the word "conspiracy" comes to mind, does not require them to perform the criminal act, only their agreement to act.
So the CEO says in court: «I am now aware that some of the issues on your jira backlog caused damage to our customers. The very-well-compensated programming team leader and the highly paid programmers reported to me that there were no such issues in the backlog, and based on their written assessment I decided to release the new version. It would be impossible for me to check every detail, and therefore unreasonable for the jury to expect that.» And the jury agrees, and someone goes to prison but it isn't the CEO.
Nice strawman. The prosecution reminds the jury that the CEO got paid 33 million before bonuses and the programmers only got 150k.
Eh, my current project manager does not even seem to check every detail and we appear to be moving by pretty dashboards, so I expect CEO will have even smaller, simpler dashboard. Fwiw, if CEO got in front of the jury, I would expect things to look bleak for the CEO ( it is not exactly a favored class now ). There is a reason it does not happen often ( for example outright fraud ala Bankman ).
Why can't the government mandate a board replacement? The board can figure out for themselves who is responsible, I would guess the finger would typically point at the CEO.
Boards are often toothless though, just look at Tesla's.
Replace the C-suite. This is done frequently in M&A's and other corporate strategies in extremis. Fire the guys at the top and replace them with people with good track records.
You can rotate people in and out of the C-suite, but incentives and culture aren’t going to change. These people are largely figureheads that get paid a lot of money because they are Ivy Leaguers whose friends on company boards who set their salaries are all Ivy Leaguers, too.
It’s not like Boeing is going to get a new CEO and then suddenly middle management is going to start prioritizing safety, engineering rigor, and risk management over profit.
Counterexample: Nadella
If the new CEO doesn't want to go to jail, then they'll make the changes.
You would keep the status quo. The problem with Boeing is the replacement of a strong engineering-first culture with a profit-first culture over decades. It's a classic playbook: acquire company, erode product quality and culture for profit, pay out shareholders, discard hollowed-out husk.
How do you even "change management culture" without punishing people who are innocent of any crime other than being a manager who embodies the sort of management culture you're trying to stamp out? If you limit yourself to firing/prosecuting the specific managers that committed fraud/etc this time nothing will change because those guys only existed in the org and operated that way because of the broader management context. Sweeping layoffs are probably a necessarily prerequisite for fixing Boeing.
"How do you eliminate fraud from a company without punishing managers who are innocent of any crime other than being a manager who embodies a management culture that promotes fraud?"
Idk, doesn't sound like a problem to me.
My point is that this should be done, and trying to avoid those sweeping layoffs is misguided.
Agree. Seems like great incentive for the next replacement manager to not turn a blind eye or be willfully ignorant like it's not their problem.
This is such a "this looks tough, I don't feel like doing it" take. Who is responsible? As others have said, the structure of a corporation defines that. If person A has to do what person B says, then B is responsible. If B "didn't know", then B has been lacking.
It also avoids sacking the "innocent people" and it sets an example for other companies. The greedy corporate culture really needs a bit of check-and-balance.
We do however have to allow for person A intentionally hiding from person B what they are doing. Person A should check, but it is impossible to see everything so we do have to allow for person B committing fraud to hide from audits.
Sure. But then B should prove that A did so. And even then, if B had threatened A, even implicitly, B can still be considered responsible for the fact that A didn't inform.
The CEO. America does not put CEOs in prison anymore. Yes, the occasional CEO will go to jail for fraud, but when people actually die, like this, the CEO and the executive suite goes unpunished. When the justice system starts putting CEOs in jail, is when we will see their behavior change. Until then, all of this with Boeing is nothing more than lawyers and legal fees.
What Boeing needs is competition. There is Airbus, which apparently doesn’t scare them enough, but there used to be a lot more in Boeing’s earlier years.
Unfortunately an airplane building company has high upstart costs and is also not a cool industry to get into.
Serious question: why not? Why couldn't we require Boeing to change its culture, and then verify and enforce that change? Verification might involve periodically interviewing employees across all levels of the organization, performing spot checks and audits to make sure that procedures are being followed (no more failing to enter a work item into the system), and so forth.
(I don't mean to imply that this would be feasible under current regulatory law – I have no idea whether that is the case or not. I'm just saying that you could imagine a world where this could be done.)
Disagree. I think most people can see how lucky it is for them that they can avoid an expensive and protracted court case, just say "oh yeah, we're guilty of a serious fraud" and the only consequence is some fines that amount to about 1% of their annual revenue. With consequences like that, it seems like the government is actively encouraging them to commit fraud...
This is simplistic, but it's a start for a discussion: you look at the organizational chart, start from the bottom where the people working on the product are, punish all the line from there up to the board (all the C*).
Then people will start asking questions about what they are told to do, because they know that if they do something wrong they're going to jail or have to pay the fines themselves, not a bank account of the company. And they won't have much else to go to get shielded from responsibility, because all jobs will be like that. Even our own jobs.
There are no layoffs of you apply the punishment into the shareholders. Confiscate enough of the company proportionally to the fine value.
Shareholders are, of course, free to sue the actual decision makers afterwards to pin down any non-mandated illegal behavior and recover their losses.
And as it stands they've already been losing money for the past 5 years. They could be losing a lot more money.
Granted a lot of those losses are due to their own mismanagement of projects like KC-46, Starliner, AF1, etc.
It's funny... when some people get paid A LOT of money, it's because they have "a lot of responsibilities", but when something goes wrong, those responsibilities suddenly vanish.
You have to get the leadership by the balls. The CEO isn't going to change a company's culture alone, but she has leverage and connections. If they know they face prison if the company plays foul in a major way, they will put pressure on their deputies to change culture.
Also, fines that go up to say 10% of global revenue. That ensures that even activist shareholders take note and do not pressure the CEO to cut corners.
It is completely ridiculous to criminally prosecute leadership for crimes which happened without their knowing/consent/acknowledgment. It would be a perversion of justice to jail someone because many levels down someone else committed a crime. The best corporate culture does not prevent criminality.
Well what are the ridiculously high salaries for if they don't even take responsibility. I mean parents are liable for their children, so why should a CEO not be made responsible for the culture of the corporation underneath them?
Because that would be a perversion of justice. You can not pay someone to take on criminal liability for crimes they didn't commit and could not have any knowledge of. Just imagine what precedent this would set if it was allowed. If courts would accept that criminal liability can be transferred in exchange of cash, how would the justice system look like?
"Culture" is completely ephemeral and having a court of law determine that the CEO "caused" some change in culture which then caused criminal behavior is ridiculous. This obviously can not be proven "beyond a reasonable doubt".
Parents do not take on the crimes of their children. They are criminally liable for not overseeing their children's action and/or for not preventing their actions, which is something totally different.
So you are saying that in a case like Boeing's the CEO was completely unaware of the shitshow at their company and couldn't have taken appropriate actions?
A dysfunctional company with bad management is not a crime. Putting a CEO in jail because he is bad, not because any crime had been committed, is an even worse idea.
The specific case here about criminally negligent software design errors almost certainly never came up to the CEO. If there is evidence otherwise and the CEO was aware of the problem and decided that the risks were acceptable then he obviously should go to jail. This was not the case here as far as I am aware.
Knowing of the issue is the important thing here. If you want another case you can look at the Diesel Gate Scandal at VW, it is German law, but the single most important question is always "who knew", because if the person did not know and had no reason to want to know he HAS to be innocent, regardless whether it is the CEO or anyone else.
It’s the CEO’s job to make sure these things “come up” to him. If he didn’t know about an engineering problem that got people killed then he is negligent and still should go to prison.
I don’t get all this simping for CEOs. CEOs don’t need us to defend them on HN. Trust me, they are doing fine without passioned arguments in support of them.
He or she is responsible for the culture and governing within the company. So either way they are involved either by knowing and ignoring or by setting the precedent for this to go ahead without their knowledge. The punishment for those might differ but it's not a free pass.
What is the problem with CEOs starting internal investigations to see if there are any (safety/criminal) issues?
Why does the cost of investigation have to be paid by society?
The responsibility doesn't come from the money, it comes from being the Chief Executive, with nearly unlimited operational authority. The money would be compensation for liability that would be inherent to their position.
Criminal liability can not be transferred. The idea would be rejected by every sane court as it is a perversion of justice and sets unimaginably bad precedent.
Criminal liability cannot be transferred, but additional liability based on having the authority to oversee and direct a crime where one should have been aware is something that already exists: see RICO. No one is saying that the employees who committed a crime should be absolved, people are saying the chief executive should be additionally liable as they are responsible and, if they didn't know, should have known by this point.
It is not completely different. The CEOs should be liable for not properly overseeing their company and for not preventing the illegal actions of the company they're in charge of.
Their company is filled with humans, though. A human can do something illegal.
For example: if someone breaks into a bank, do you always fire the CEO?
Then: if an employee of the bank breaks into a bank, now do you always fire the CEO?
Parents are generally not criminally liable for the crimes their kids commit. They might catch some related negligence charges or something, but if little Jimmy decides to rob a 7-11 his mom doesn't get sent to prison for armed robbery.
The way i see it (and here I describe how I think the law should work, not how it works):
If a Boeing engineer has a breakdown and robs a 7-11, the C suite of Boeing is not responsible for that.
If the Boeing engineer murders people in their course of duty because of the incentive structure set up by the C suite then they are responsible for that. How do you prove that? The same way how you prove anything. Lots of discovery which reveals concrete evidence of the C suite setting up and maintaining said incentive structure and then the prosecutorial team describing the connection to a jurry of their peers.
It is the difference between little Jimmy deciding to rob a 7-11 because they are dumb as a rock, vs doing the same because they grown up in an organised crime family.
Under this theory I think maybe you could get the C suite for negligent homicide, but murder seems like a huge stretch for anything but a kangaroo court.
I don't think that I mentioned a specific crime in my comment.
Huh, you mentioned at least robbing and murder.
They should be liable by default. But of course people at a lower position can be liable for their own crimes. That is for a court to decide.
That is a perversion of justice and sets unimaginably bad precedent.
You just keep saying “perversion of justice” over and over as of it is self-evident.
And as if precedent doesn't already exist - check https://treeandneighborlawblog.com for tons of (smaller) examples and also the concepts of "attractive nuisance" and such.
Juries are unlikely to criminally convict in a true case of "didn't know and couldn't know" but they also are likely to award large civil settlements even in those cases.
10% ?
What? if you or I were found negligent that resulted in hundreds of deaths we would be in jail for the rest of our lives, effectively fining us 100% of ALL revenue FOREVER.
At a minimum they should have a massive fine (like 100% of revenue for a year) and do whatever it takes to halve the stock price, thus punishing the stockholders too - after all, they invested in a business that killed people, they should be punished too.
The C-level people have already failed catastrophically, they need replacing wholesale. This is done frequently as other corporate actions like M&A's or bankruptcies. There are specialists whose entire career is dedicated to being temporary CEO's. They are out there. They should be used at Boeing.
Yes, pressure them to do internal investigations (if they like to stay out of prison).
That will also keep the costs at the company and not with society and after the fact.
Companies are persons, except they are not.
They cannot die. They cannot go to prison.
This concept of a moral person is a totally unfair advantage that they exploit again and again.
I hear this claim a lot but is it really true? Corporations in most countries are „legal persons“ in the sense that they can act like a person. This is what limited liability is all about. In fact the very name „incorporation“ comes from giving a sort of „body“ to an entity that otherwise doesn‘t have one in order to shield the owners from liability as it should be.
I do not think that a corporation is considered to be a person beyond that. It‘s merely a way to establish limited liability for shareholders which requires a mechanism for the corporation to sign contracts without an owner signing on it‘s behalf.
They can make investments, sue, go bankrupt, have bank accounts, like a person, in their own name instead of the owner.
Can you explain why that matters? Yes a company can have a bank account. A company also has a name, like a person. An age, like a person. But what does that matter?
Certain laws apply to any person, which includes companies. A company can own things like you own things, and has similar protections. A company is accountable to its promises (contracts, fraud...), like you would be, although punishments might be different.
It's like a union type: `type Person = Human | Company`. Or like inheritance: `class Human(Person)`, `class Company(Person)`. Or a typeclass/trait/interface...
It allows you to reuse many laws for both humans and companies, without having to specify them or define special cases every time it is mentioned.
Sorry, again I don't understand why this matters.
I think the point of OP was that in many ways companies have many of the same rights and privileges as individuals, but cannot be punished in the same ways.
I don't really understand that as a point, though. What would punishing a company look like? Why wouldn't we want to figure out how to punish (or hold accountable) individuals, instead of focusing on the fact that we can't punish legal entities?
We can't punish countries either, even though they can also do these things. We can only punish people. So what?
Actually, it's the same point.
We are currently trying to punish entities (with fines), and it's ineffective.
We should move back to punishing people more, and moving back the responsibility to people, instead of pretending companies are people, and therefore responsible.
But it's such a strange angle. Should we stop companies having bank accounts in order to do that? Who cares if they have a bank account?
Quite the opposite, since they have bank accounts, let's:
- Make them more liable.
- Make the people behind them more liable.
- Give companies limitations. What would be the equivalent of jail for a company ? Unable to sale for x years ? How long a company should be able to exist ?
Right now there is way too much power and shielding at the same time.
If they can't sell then they don't have money, and everyone is fired. Is that what you mean? Why are you trying to make companies into physical people who can be punished separately to their employees/shareholders, instead of thinking of the actual outcome you want and coming up with something to achieve that?
You can definitely punish countries as an independent entity: with trading sanctions, refusal to give in on certain diplomatic compromises, or different degrees of military retaliation.
Same with companies: mostly fines, but also limits on how they can operate, additional oversight...
Of course, the consequences trickle down to people, but these punishments are not meant to target any given individual, and if the individuals in charge change, the ones that leave don't necessarily carry the punishment with them.
This makes sense, legal entities like companies are guided by incentives. And it sometimes makes more sense to punish the legal entity to change its behaviour, by imposing disincentives, rather than punishing whichever people are running it at the time.
For example, people within a company might pressure an individual to commit a crime, because even if that individual might get punished, the company may benefit as a whole. But if the company's (financial) survival is at stake, everyone is more likely to collaborate to prevent that situation, including the shareholders, if the punishments are big enough.
The point here is, that for issues like negligence and fraud, the current punishments are not significant enough to act as a real deterrent. The punishment on the companies is too lenient (they can absorb the fines, they are rarely an existential threat), and the punishment on the individuals responsible is too lenient (difficult to attribute culpability, limited liability...).
We do want to figure out how to hold individuals more accountable, as you said, we are just having a conversation about why it works like that right now and what could be changed to improve it.
We moved the power from the human to something we said is "human enough" to have them. But this thing is a concept, it doesn't exist. It can't die. It can change forms until it doesn't pay taxes. It can't experience pain or go to prison.
Basically, we gave the power to the company without the responsibilities to the humans behind it because there is less consequences, less skin in the game.
Sorry - we moved what power?
The power of having a bank account, of moving funds around, of signing contracts, etc.
Before that, companies had to have everything attached to a human, not the company. So the human was responsible.
You are so used to it that you think it's normal, but it's not.
It's a concept we have created: that companies can act in their own name, like they are actually something concrete.
But when we did that, we failed to give companies expiration date, something like inheritance tax, the equivalent of prison and so forth.
Something that doesn't exist, a concept, enjoy many things a concrete human can do, but won't pay nearly the same consequences.
In fact, it's sometimes in the title: limited liability company. It's by design.
And of course, it allowed humans to do a lot of things without risking to lose all their life if they failed. But we went to far and now, we have companies that can enjoy all those benefits but with much less limitations than the humans counterpart.
It makes them too powerful.
I don't think companies can sign contracts. What is the power of having a bank account and moving funds around? It's still people deciding to do this, and doing it, just under a group name. What power?
People are still doing it. You seem to have totally mis-framed this. If you say "people can get away with doing things inside a company" you'd have a point, perhaps, but you're talking as though companies are sentient.
It doesn't matter if they are sentient or not, does it? Maybe in the future they will be or act as if they were, but the result will be the same.
Of course it matters. What does it meant to punish something that isn't sentient? It's like bemoaning the fact that you can't punish the car that was driven into someone.
Depends on if you care about outcome or morality. Already now we use terms like punishment, reward and adverserial competition between neural networks.
We do have those terms. The way they are used is not relevant here.
If the entity (be it a corporation or AGI-driven corporation) learns from the punishment (or its peers learn by observation) it doesn't matter if the entity is sentient, the outcome is less of the unwanted behaviour. I didn't mean anything more complicated than that.
Modern companies are a lot like we expect AGIs to be.
It's an interesting thought that I keep coming across, I'm not sure if I necessarily agree with it.
In a sense, companies are super-human intelligent autonomous beings, with much more power to act on the world than any individual. We are able to partially control them within a complex incentive and enforcement structure, but it is difficult to fully align them with what society needs.
It's good news in a sense, we can control AGIs with similar systems, they have the same resource constraints as any other entity if they want to have an impact in the real world.
The U.S. is not going to shut down Boeing. How many jobs would be lost if that happened, especially in this economy?
The fine is quite low.
It's a monopoly. Just break it up.
"We don't negotiate with [economic] terrorists."
$77b annual revenue. Positive quarterly growth rate the last 8 out of 12 quarters. Two global wars we refuse to negotiate peace in and Boeing is a major weapons supplier.
Then again, if you kill and scare enough people with faulty planes, the state of the economy will be immaterial to what will happen to your interests.
This is just so silly. Shutting down a company results in people losing their jobs. No terrorists involved.
I'm always baffled by this unholy protection of "jobs".
Making asbestos essentially illegal resulted in tens of thousands of people losing their jobs and shutting down coal plants will do the same.
It makes no sense to protect jobs at all costs, and doing so can have very bad outcomes.
If a company is doing something illegal or dangerous or that does not serve society anymore, we shouldn't bend over backwards just because people will lose their jobs.
I wasn't invoking any unholy protection of jobs. It's very clear the context I was replying to: that "job loss" isn't "economic terrorism".
Can we not treat the comment section as that party game where people only read the previous sentence of the story and write a follow-on sentence? You have the whole thread available to you.
And ending murder and child victims results in people (investigators, litigators, counselors) losing their jobs. Should we stop trying to solve these problems too?
Spirit Aerosystem will soon no longer exist. but the assets and almost all the jobs will be divided between Boeing and Airbus. If Boeing were split up the result would be similar.
The US has propped up Boeing, because it's primarily a military contractor.
People keep saying this but it borders on conspiracy talk. The Air Force leadership has been pissed off at Boeing for well over a decade. Every project they've been given has turned into a clusterfuck even moreso than average. They fortunately had the foresight to not give them any cost-plus contracts, so at least it's Boeing eating most of the cost overruns rather than the Air Force, but the point remains that Boeing mismanagement has been a headache for the military.
Politicians care about getting elected, which means they don't want layoffs on their watch. Politicians don't care what the military thinks or else they'd stop funding a lot of dumb projects that the military doesn't give a shit about - of which there are many.
There are so many examples of congress putting their hand on the scale that I really don't understand the popular insistence that the military is the problem here.
The military isn't the problem, it's that the military has no other options.
Who else are they going to buy planes to bomb different-colored countries with? SpaceX? Airbus? It is to laugh.
When you get a company that is too big to fail, it rests directly on the government for not identifying and solving the issue earlier.
Boeing hasn't won any major military aircraft deals in recent decades.
The latest big bomber purchase, B-21, went to Northrop Grumman, as did the not so recent B-2. Fighters have been going to Lockheed (F-22 and F-35).
The biggest recent win for Boeing was KC-46 tanker airplane, which is just modified 767. I suppose there is also the handful of F-15EXes that are vestige from their McDonnell Douglas merger.
Military brass don't control procurement. That would be Congress. In fact the military often frequently has systems it doesn't want/need precisely because Congress. See the Zumwalt destroyer and the Littoral Combat Ship.
You put in place an incentive to not do these things. Corporate executives and boards do these things because they're incentivized to do so through stock price-based compensation.
Great risk should come with great reward. We no longer assign risk to most executives at publicly-traded, multinational corporations, but the reward is still great.
I'll leave it to your imagination to figure out what the risk should be, but it should be something that a golden parachute shouldn't be able to resolve.
> Great risk should come with great reward.
In today's culture, I often hear C-suiters talking about how much "risk" they are taking, to justify their outrageous salaries and stock holdings, but I almost never see them pay much, in the way of penalties, except for the very smallest, most "raw" companies, where they have, literally, sunk their entire net worth into the endeavor.
It seems that, once a company has reached a certain threshold, the only real "risk" that executives experience, is that they'll only get a 5% bonus, instead of 30%. So, only $5M, as opposed to $30M.
AUTHORITEH: "Put out your hand!"
GUILTEH: "OK"
AUTHORITEH: <SLAP> "Bad Executive! Bad, bad, Executive! Don't let it happen again! See you at the party on Saturday?"
Boeing employs millions (mostly indirectly via downstream cottage industries) of people and I think is the leading net exporter by revenue of the US. Politicians don’t want to hurt them too badly because all those employees vote.
That's why you limit the liability of the company as a whole, but create great risk for the actual executives who decided that safety came second to the profit margin. Again, you can imagine what that would be, but when you compensation is in the tens of millions and there are hundreds dead, well... the risk has overcome the reward and the punishment should match.
Boeing's problem is its management. If you tell the rank-and-file worker to use the company's billions of dollars worth of production capital to build a quality airplane and hold them to it, they've shown they have the ability to do so in the past.
Additionally, even when they fail spectacularly, they often get golden parachute payments in the 10's of millions of dollars.
I agree with that statement, but want so add: I believe that whatever you propose will have significant problems and is likely worse than the status quo in some major way. Sometimes I'll only be able to tell you what those problems are in hindsight. Sometimes those problems are fixable sometimes not.
Don't let this dissuade you from thinking about the problem - it needs to be thought about. However do think about is in more than a shallow way, look at it from all viewpoints (including ones of people who disagree with) try to see what the downsides are and how to mitigate them. Good luck, if enough people do this maybe someone will come up with a good enough answer, (as opposed to perfect!) and you will understand the problem well enough to help debate why the downsides are worth it.
Planes are falling out of the sky. I'm a fan of nuance but we're a little past that now.
Even with that, flying is still vastly safer than driving. We thus know there is a level of risk society is willing to accept.
If your safety systems fail, we pierce the corporate veil.
You could also just send a lot of people to jail.
One of the problems here is that a lot of the time, the worst thing that happens to an individual from the company is just that they get fired. That's just not a very strong deterrent when the upside if you don't get caught is potentially huge raises/promotions/bonuses.
Imagine if the worst thing that could happen to you when robbing banks if you get caught is just that you can't rob banks in that area anymore. That's kind of how this works for individuals in corporations.
Proving something like criminal negligence is extremely hard.
The supply chain of software in aerospace is extremely long and finding out who exactly was acting negligent is near impossible.
Yeah, hard to prove.
Stonecipher was CEO nearly 20 years ago. Are you proposing to put someone in jail for crimes which happened over a decade after he left the company. Someone which has certainly ZERO knowledge of anything related to the MAX?
It is not illegal to be a bad CEO.
Absolutely. If he made systemic changes to the company (and those are proveable) that focused on profit over security he belongs in jail, no matter how long it took for the murder to take effect.
He lead an airplane maker, not a coffee shop. Focusing on profit the way Boeing did was planning a murder and trying to reap the profit in the meantime. All the participating management belongs in a court room.
The supply chain is long but it's supposed to have exceptionally detailed documentation. Follow that document trail and start prosecuting people when those documents start turning sour, because not documenting the work properly is a crime in itself.
This won't be sufficient to fix Boeing, but it would be a start.
When you dismantle a company, people lose jobs, that does not look good on TV for politicians.
Wipe out existing shareholders and sell fresh shares on the open market. Nothing else needs to change.
I think you'd probably want to replace the board and the top management also.
Who will buy those fresh shares, knowing that they could be "wiped out" by the discretion of ? the government? at any time? for actions that people they don't know committed?
Most corporations end up building systems that spread responsibility and make it very difficult for anyone to believe they can say no to things they disagree with. How many decisions are supposed to be made by groups where nobody can claim actual responsibility? Commitments that are supposedly made by a team, but where it's clear to the team they have to say yes? People get very nervous, and reviews tend to suffer, when you just ask for dodgy work orders in writing. Remembered the whole idea of the Toyota model, where everyone can theoretically stop the line? We often build systems that guarantee the opposite.
Regulating decision making in companies, however, as to make sure people have to look at their own personal risk when bad things are on the line is going to get a lot of pushback, precisely because that's very inconvenient. But without something like this, the Wells Fargo situation is the natural outcome that will keep repeating.
Toyota also failed miserably with the unintended accelerator pedals. And basically pulled some of the same stunts with denial and cover ups and blaming everyone but themselves (legally you have to do this I suppose).
So I don't think they're a great example of having excellent QA everywhere. And kind of helps with your point of if the ORG and the division of that org is really thinking about quality and what they ship then it carries through. But that might not be the case for every part of the company (I.E. Boeing)
Turned out to be extremely bad code and some potential mechanical issues from what I understand[1]
[1] https://users.ece.cmu.edu/~koopman/pubs/koopman14_toyota_ua_...
How about we put responsibility on the CEOs and other C-levels?
When it comes to justifying the compensation packages, they are first to claim that they are responsible for the company achievements.
If they would actually face jail-time for non-disputable wrongdoing, then it would actually balance it out.
For spilling a hot coffee cup you get $ 2.7 million worth of punitive damages. But for killing more than 200 people and trying to hide the evidence, we'll charge you 200 million and call it a day.
That's less per person than the price of a hot-coffee spill.
While I understand the spirit of what you're saying it does the woman a disservice to talk about it as being only spilling a cup of hot coffee. She was severely burned and required substantial medical treatment:
""" Liebeck went into shock and was taken to an emergency room at a hospital. She suffered third-degree burns on six percent of her skin and lesser burns over sixteen percent.[14][13] She remained in the hospital for eight days while she underwent skin grafting. During this period, Liebeck lost 20 pounds (9.1 kg), nearly 20 percent of her body weight, reducing her to 83 pounds (38 kg). After the hospital stay, Liebeck needed care for three weeks, which was provided by her daughter.[15] Liebeck suffered permanent disfigurement after the incident and was partially disabled for two years.[16][17] """
https://en.m.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Rest...
They didn't actually get those damages.
To quote wikipedia:
Corporations understand and fear only 2 things.
Money. Control.
Either the fine should be high enough to alert investors and ensure that they make the company change its ways..
Or
The govt. should provisionally or in a timebound manner take a seat or two on the board.
Let the govt. Do this for a few companies, and every otger company will fall in line.
Corporations must be treated as children of the country they are born in. Sure, they become big, earn money for the govt. and are essentially independent. But if the kid goes naughty, a watchful eye and a rap on the knuckles is how you teach manners.
how you teach manners
You can't teach a corporation manners. If you are going to talk about corporations as if they are people (and legally they want us to treat them as people) then you have to face that they are, technically speaking, artificial psychopaths (incapacity to experience guilt, failure to conform to social norms and respect the law, reckless disregard for the safety of others, deceitfulness in pursuit of profit, etc). Very powerful, immortal, artificial psychopaths.
There should be capital punishment for legal persons.
Problem is that no nation is really keen on punishing their own industry.
Currently the overall culture for selecting business leaders is suboptimal in the western sphere and beyond. It incentivizes behavior that can lead to such problems. Nobody could sell a 10% growth in reliability to investors if it doesn't come with a similar revenue increase as well.
Wells Fargo’s balance sheet was also capped which led to massive shareholder losses arguably.
Just design the incentives so they want to fix themselves. Jail time etc.
jail time for CEO would be a start?
Change the system.
A blind focus on the concentration of wealth will only improve tech if it helps profit, will only improve lifes if it helps profit, will only protect the environment if it helps profit, will only influence politics to increase profits. It will try to create poverty because that eases exploitation. As you already hinted, the motivation has to change.
Basically jail need to be much more common, and/or these fines come directly from a CEO personally. Then you’ll see change.
This won't change if the buck can stop with a non-human legal entity. The people who are incentivized to make actively harmful decisions like these need to also carry personal risk for endangering human life.
Otherwise it is a decision where the manager who decides to stretch the limits will get praise and cash if it works out, without carrying much or any personal risk — even if they are fined or fired, chances are they already got their share.
If we want such things from happening the people taking these gambles need to be painfully aware that it might land them in prison for a long time, and fines need to be proportional to the money earned — that means higher by a magnitude or more so there is not even a doubt that it won't pay off.
I like to live in a society where people building critical infrastructure go to prison if they are willingly taking shortcuts.
We used to have a law that two different types of banking institutions could not be owned and housed inside the same entity. So, effectively, and based on history, yes. You absolutely do need to do that.
Not particularly. Congress has broad and sweeping powers. They just don't use them.
These are publicly traded companies. In the case of Boeing, more than half is owned by institutions and not individuals, and these institutions are known to have questionable practices in all sorts of industries. Again, the solution seems annoyingly simple.
CEO on even numbered days: All assets are always tradable.
CEO on odd numbered days: We're systemically important and need to be shielded from liability.
The agencies that oversee this need to have the will and the power to act. Regarding the former, our elected officials are mostly divided into two camps 1) the ones who work to minimize the will of agencies and the ones who are sort of inept and feckless about safeguarding agencies' ability to act.
Regarding the latter, the recent scotus Chevron decision monkey-wrenches agency power (seemingly by design). Bad actors will inject judges into the oversight process, in an attempt to sabotage regulators ability to regulate; Chevron hugely amps up the effectiveness of that attack.