Friday, February 22, 2008

Northern Rock Shock Needs Head Doc

I sent this letter in reduced form to the Guardian today:

It is an affront to natural justice that the Government seems unable to access the assets of Granite, Northern Rock's off-balance-sheet "special investment vehicle" (Guardian front page, 21st February). It is unacceptable that we, the people, should be forced to put £100 billion of our money at risk while the executives at Northern Rock who caused the mess should be able to laugh all the way to their £49 billion bank account.

Corporations have obtained for themselves the status of "legal personalities", and it is clear that at least some of them have a sociopathic personality disorder. They act exclusively in their own interest, and like sociopaths they are also prone to dissociative states, where different parts of their personality can act semi-independently. This is an issue in environmental law, where large corporations can benefit from the profitable activities of their subsidiaries, but can dissociate themselves from compensating victims of harm done by those subsidiaries.

It is very clear that there needs to be a change in corporation law to cover this deficiency, by making corporations through their directors and shareholders fully responsible for their actions, and ending the power of abstruse legal clauses to break the chain of responsibility.

Shareholders have "limited liability" which means that they can profit from the firm, but are indemnified from losing if the firm gets fined for some malpractice. This example of having right divorced from responsibility needs to be addressed. If shareholders stand to lose by acts of corporate irresponsibility, the Corporate Social Responsibility sector of the corporation will get to look more like the brake lever, and less like the ashtray, on the corporate motorbike.

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