Samir’s Selection 12/08/2015 (p.m.)

  • The offence is that of being responsible for an activity in which wrongdoing took place, not of committing the wrongdoing itself.

    If it is a criminal offence to be in charge of a den of thieves, the prosecution needs to establish only that it was a den of thieves and that you were in charge of it, not that you were yourself a thief. It is no defence that you thought the organisation was a monastery, which is broadly the argument employed by those made “physically ill” by the discovery of what their subordinates had been doing.

    Primary responsibility for rate-fixing scandals lies with those who allowed a culture in which such behaviour was seen as normal. This is not to absolve the individuals who actually perpetrated the crimes. It is easier to sympathise with the junior and modestly paid people employed in call centres to sell often worthless payment protection insurance. No sympathy should be extended to their bosses, who benefited from transactions that were in essence fraudulent; still less to those who legally challenged attempts to stamp out the shameful practices.

    …The worst argument the lobbyists present is that an effective regime of managerial accountability would encourage talented managers to move abroad. If these talented people find it impossibly burdensome to accept responsibility for the actions of their subordinates, their talents are ones Britain would be better without.

    The question parliamentarians should ask themselves is whether, under the proposed regime, the people actually responsible for recent instances of criminal rate fixing and fraudulent PPI sales would have been subject to severe regulatory sanctions (criminal penalties are still not in prospect). Because only if the answer is yes can we be reasonably confident that similar events will not happen in future.

    tags: accountability responsibility corporategovernance regulation quote law policy publicpolicy incentive

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