Jail Time

I heard this story on the news yesterday: Hungary has jailed the executive of MAL Co., the company that appears to have disregarded safety and maintenance provisions that led to the collapse of a holding tank wall, releasing a million gallons of post aluminum processing sludge (which contains the toxic chemicals cyanide, cadmium, and chromium.) Eight people have died as a result of the spill, and hundreds evacuated.

It's an interesting action. We often give corporate cover to the individuals who manage and work at a company, allowing their malfeasance to go unpunished (we punish the shareholders instead, by fining the company and reducing it's profits.) I understand well the thinking behind this strategy: Sometimes, in the course of business, unforeseen events occur, property receives damage, people get hurt: We don't want to go on a hunt every time, else few (if any) people would be willing to run a business, and we all would suffer. Besides, if the actions and fines are large enough, presumably the shareholders would sack the management of the company, and install new leaders who will work to ensure that profits aren't endangered by carelessness or neglect.

But we must also be mindful of the fact that businesses and corporations have no intrinsic morals: Only people are moral agents capable of determining their course of action. As a society, we should certainly demand moral behavior -- and we can communicate our definition of moral behavior by the rules and regulations we levy upon the conduct of a business. When those rules or regulations are disregarded, willfully ignored or knowingly violated by employees, it is those same employees that should pay restitution to society, not others.

We don't yet know if there was criminal misconduct at MAL Co., and will have to wait for the outcome of the Hungarian Courts. However, since they justify their high salaries upon the idea that a CEO imbues his company with his philosophy, drive, and vision, if the individuals of a corporation have been found to be acting immorally, we should certainly start at the top in filing criminal charges, as Hungary has done.

I've often wondered how much corporate wrongdoing would be cured by the simple expedient of jailing the CEO. Neglect to follow established procedures for cleanliness, and your eggs become tainted with Salmonella, sickening consumers? Go to jail. Rush the process in violation of regulations and procedures, having your oil rig explode and spill millions of gallons of oil? Go to jail. Violate OSHA standards, causing workers to be injured or killed on the job? Go to jail.

It'd be interesting to try. I'll be very curious to see the outcome in Hungary.