Last December, I wrote a blog on this subject. Sadly, the events of the past 12 months have only sharpened the need for an international strategy of capital punishment for corporate felons.
In the competition to accumulate capital, companies have one significant advantage over their human competitors: they do not have to die every now and again. A well-run company can live forever (ignoring for the moment, M&As and other cannibalistic restructurings). This means a saving of the typically 40% death taxes levied on the estate of death tycoons every fifty or sixty years.
There’s more: mediaeval states routinely maim and kill citizens that step out of line. More liberal states will lock up their human malefactors for rather long spells. Corporate felons, however, even when they are caught for offences as grievous as the Holocaust, will simply write a cheque.
That is powerful incentive for corporate governance to go for broke. Companies that are serially implicated in genocide, wilful environmental catastrophe, 21st century slavery and unwaged forced labour around the world can continue their business as usual. All they need do is set aside money for the day of judgement – or the day of Ritual Appeasement of Public Opinion by the writing of a cheque for a charity.
Corporate CEOs are generally more blatant than elected politicians because,
- their small coteries of investor-selectors are primarily interested in their own dividends;
- their positions are cushier; there is no ‘opposition’ as such, and the successful CEO can expect to spend his career in the same boardroom, once he delivers half-decent dividends;
In the last twelve months, as the engines of world commerce grind to a halt, as economies begin the big roll back, crushing millions of jobless and desperate people underfoot, it is more important than ever to include the sanction of punitive liquidation in the toolkit of justice systems and fiscal regulators.
A new world economic order must be able to discriminate between competently-run companies on hard times, which can be bankrolled at public expense for the public good, and criminal enterprises.
In Amanpour’s disturbing CNN documentary, Scream Bloody Murder, a courageous widow whose five sons and husband were slaughtered by a Hutu neighbour was filmed serving a meal to the murderer who had since served a 7-year-jailterm. She had forgiven the atrocities. And yet, I could not help bridling at the smirk on the man’s face as he described how he had asked, expected, and received forgiveness. The subtext being: what choice did she have? It was as though this atrocity-cum-forgiveness package had always been the plan.
I pick up blasé overtones of a similar blackmail in the maledictory warnings of the CEOs who are currently badgering governments for bailouts on the grounds that they are too big to be allowed to fold. It seems to me that before taxpayers become involuntary stakeholders to some of these companies, basic enquiries should be carried out to ensure that voters are not shoehorned into the role of abettors of gross illegalities.
It may well be that while some companies cannot indeed be permitted to fail, their conduct has attained a level of recklessness or criminality that requires both their ownership and management to be hollowed out, with the human agents behind the crimes exiled from boardrooms for good. That is liquidation by a couple of other names. If a corporation has a soul, it will be found here: in these caverns of governance where the gun-running decisions are taken; in the executive suites of large investors who have the power to force boardroom changes, but whose consciences are smothered by the flurry of healthy balance sheets. This acid test should become standard operational procedure. It should be one of the reforms that Gordon Brown and Barack Obama should press at the fiscal boudoirs of their circuit. It will ensure that rogue execs and their indulgent shareholders do not get another bite at the cherry.
It will of course be a tragedy for many innocent managers and small shareholders caught in the crossfire, but the world was always ever so. In good times as in bad, companies fold, companies cut thousands of jobs routinely. But once we bring in capital punishment for the bigger sins of big capital, we would have pulled off the coup of the millennium: we would have created a fairer world by forcing issues of common justice that spring from our shared humanity onto those amoral balance sheets.