We don't have corporate death penalties because to a first approximation there are no laws that enable us to do that. To put companies to death, we'd need to pass enabling laws. But those aren't the only new sanctions we can enable in new laws.
It seems to me that we can break down those impacted by sanctions against corporations as follows:
* Officers and directors of the company
* Employees of the company
* Shareholders in the company
* Customers of the company
When we think about how to structure sanctions against a company, we should think about where (a) deterrence will have the most effect and (b) where retribution is most warranted.
How does a "corporate death penalty" apply those effects? It seems to me:
* Officers and directors of the company have a demonstrated track record of harming their employers for personal short-term gain; see, for instance, every stock buyback scandal. Moreover, officers and directors tend to be wealthy and thus more likely to have a professionally or at least competently managed portfolio: they're diversified out of a lot of impact.
* Employees of the company have extremely limited ability to alter strategic decisions made by management, and so aren't useful for deterrence. They also tend not to profit from strategic high-level malfeasance, and so aren't deserving of much retribution. Meanwhile: mergers, spinoffs, and acquisitions are almost invariable dreadful for employees, huge numbers of whom are made redundant, pension obligations scrapped, benefits reduced, and so on.
* Shareholders have virtually no insight into the operation of their holdings. Moreover, vast numbers of shareholders don't even know they hold companies, because they do so through pension plans and mutual funds.
* Customers who, for instance, bought VW cars during this scandal did so in an effort to minimize their impact on the environment; the scandal is that VW lied to them. Not only are they demonstrably incapable of being deterred from future scandals, but it's hard to argue that they've in any way earned warranty confusion, loss of service stations and personnel, and slashed resale values.
Compare that to a new law making this kind of malfeasance a strict-liability felony for officers of the company. Doesn't that make much more sense than a death penalty?
While there are not criminal laws that could compel a liquidation directly, the equivalent could happen by making a restructuring unfeasible through fines, thereby forcing liquidation.
Sure, but the reason that doesn't happen is that you can't fine arbitrarily; companies can dispute them legally, and those cases are murderously expensive to try.
So I'm acknowledging that you could pass laws that make an effective death penalty (through fines or through literally forcing liquidation) a reality, but then asking: why would you want to do that? Aren't there better laws we could pass instead?
"Better laws" that directly target the management responsible for malfeasance could do the job instead of dismantling the corporation out from under that management. But the same lawyers fighting to keep creditors from forcing liquidation are also fighting for the management that hired them, no matter the shades of ethics involved in that. It's a difficult problem. In the case of VW you have suppliers and engineers being told to produce results that are not possible without cheating. And then that eventually becomes part of corporate culture and the cleverness of the cheat gets institutionalized and probably even spreads through the industry as employees move around at various levels and as suppliers sell, on the down-low, the means to cheat.
We don't have corporate death penalties because to a first approximation there are no laws that enable us to do that. To put companies to death, we'd need to pass enabling laws. But those aren't the only new sanctions we can enable in new laws.
It seems to me that we can break down those impacted by sanctions against corporations as follows:
* Officers and directors of the company
* Employees of the company
* Shareholders in the company
* Customers of the company
When we think about how to structure sanctions against a company, we should think about where (a) deterrence will have the most effect and (b) where retribution is most warranted.
How does a "corporate death penalty" apply those effects? It seems to me:
* Officers and directors of the company have a demonstrated track record of harming their employers for personal short-term gain; see, for instance, every stock buyback scandal. Moreover, officers and directors tend to be wealthy and thus more likely to have a professionally or at least competently managed portfolio: they're diversified out of a lot of impact.
* Employees of the company have extremely limited ability to alter strategic decisions made by management, and so aren't useful for deterrence. They also tend not to profit from strategic high-level malfeasance, and so aren't deserving of much retribution. Meanwhile: mergers, spinoffs, and acquisitions are almost invariable dreadful for employees, huge numbers of whom are made redundant, pension obligations scrapped, benefits reduced, and so on.
* Shareholders have virtually no insight into the operation of their holdings. Moreover, vast numbers of shareholders don't even know they hold companies, because they do so through pension plans and mutual funds.
* Customers who, for instance, bought VW cars during this scandal did so in an effort to minimize their impact on the environment; the scandal is that VW lied to them. Not only are they demonstrably incapable of being deterred from future scandals, but it's hard to argue that they've in any way earned warranty confusion, loss of service stations and personnel, and slashed resale values.
Compare that to a new law making this kind of malfeasance a strict-liability felony for officers of the company. Doesn't that make much more sense than a death penalty?