The problem is that we have insulated the shareholders from responsibility so that granny can buy blue chip stocks to fund her retirement without having to actually pay attention to the bothersome details of corporate governance. Management is doing exactly what it was hired to do: maximize granny's ROI by any means necessary.

And we get there buy fining these companies into oblivion and ensuring their executives are removed from positions of power.

Fine them? The market already does that, to the tune of tens of billions of dollars in the 737 MAX case.

Jail them? Good luck with that.

What else can/should be done to them, in your opinion?

I don’t think punishing stock holders makes any more sense than punishing all of Germany after WW1 did. You need to cut the head off the snake, not nibble at the tail. A hypothetical corporate death penalty should start at the top, then cascade down some amount of “tiers” down the executive chain. Executives tend to be the ones with the biggest stock rewards and the ones lining up unethical incentives in the first place.

Until executives and shareholders feel real pain, companies can simply make their decisions based on cost outcomes. In most cases, the financial incentive to cheat and flaunt the law is just too great compared to the risk of penalty.

Throw some execs in jail, starting with the CEO. If CEOs are so valuable that they can be paid 100x median employee wage, then they should have some real responsibility. And penalize the stock in some way so the investors feel the pain. Sure, it's not their fault necessarily; but if you make the investors angry enough, they will demand proper behavior from the companies they invest in.

That doctor has many things they can do:

1. Make and vote on shareholder proposals.

2. Refuse to own stock in any company that does not take sufficient action to "discourage corporate misconduct."

3. Etc.

And if a policy like mine were ever implemented, it's not like rugged individuals would only be able to take rugged individual action. The legal risk would reduce returns, and sophisticated mutual fund managers would have incentive to choose stocks that don't have those risks or vote their fund shares to make corporate policy changes to eliminate them.

I.e. teachers go to jail for a few minutes, whereas major shareholders go to jail for a few years or decades.

The question isn't whether companies (and thus their shareholders) should be penalized for wrongdoing. It's whether shareholders should be zeroed out by a "corporate death penalty". I think it's an interesting question, why we don't have one of those.

No argument from me that the shareholders should take a major financial loss (they should demand better safety controls), but to prevent this from happening again (which I think is the key goal, rather than plain old retribution), I am arguing that there should be strict liability for the individuals as well - throw them in jail, bankrupt them, etc, so that a message is sent that employees of all companies owe, at a minimum, a duty of care to protect the safety of the general public. Essentially take away the employees’ ability to say “I was just following orders to try to maximize shareholder value”. Give the employees, in response, some protection from being fired for upholding this new obligation.

Do you think shareholders of a company like VW, which includes pretty much everyone with a retirement plan, shoulder _all_ the responsibility? Because that's pretty much what a "corporate death penalty" means.

I'd prefer we do both. Hold the actual bad actors accountable AND also kill the company and hurt the shareholders. Anybody involved needs to have incentive to stop the bad behavior.

I'm tired of people using corporate shells as a get-out-of-jail card when they do things that are illegal and/or knowingly bad for society/environment.