For a couple of weeks now, after considering why people are working longer and later hours notwithstanding the deleterious effect on their health, I’ve been wanting to consider the wider question of Why do companies do bad things?
Recently, things have fallen into place to make this happen. First, I’ve been revisiting some old stuff I wrote about the tragic death of Moritz Erhardt. Moritz has kind of haunted me ever since I read about his death after pulling a series of all-nighters as an intern with Bank of America Merrill Lynch (1, 2, 3, 4).
That is, he pulled a series of all-nighters and died.
I read about it in the aftermath of a catastrophic hemorrhagic stroke.
How was that allowed to happen? Why would Moritz think it was OK that he could be expected to do this? Also, I finally got around to listening to a recent episode of Radio 4’s The Bottom Line, entitled Why Do Companies Do Bad Things?
I suffered a catastrophic stroke two days after losing my job as a financial lawyer in New York City. Now, I don’t remember doing anything specific that one could point to as A Bad Thing – at least in that relation. In a prior job I had recused myself from transactions that directly funded arms manufacturers, for example.
Now, that crisis was precipitated by the bursting of what came to be called the Subprime Mortage Bubble, to which the securitisation of mortgages contributed. As it happens, my specialisation was in the securitisation of trade receivables, but that’s not important right now. I’m just making the point that I was standing on the sidelines in the aftermath as financial lawyers were trying to figure out how to be least affected by the resulting tightening of regulations. Also, when bankers went back to trying to loosen underwriting standards so they could generate more deals and fees.
In other words, while people were trying to return to the way they had been doing things that had contributed and would continue to contribute to the impoverishment of people around the world. Why would they do this? They mostly seemed like nice people would liked nice wines and nice karaoke parties.
Perhaps even more egregiously, why would the people who work at car companies seek to have their products dodge emissions tests? These were the questions that The Bottom Line was trying to answer. Also, Why do broadcasters deceive? Which was quite clever, because asking the question sort of raised Aunty Beeb above the fray.
Or did it? If Aunty could hover in immaculate judgement, why was one of the first directives uttered by the panel of a consultant and business school professor, a lawyer defending corporations and executives, and a convicted cheat and fraudster that
– We must distinguish accidents and cockups from conspiracies and intentional behaviour
Y’see, the listener learnt as the programme went on that every foamy bark canker from a little acorn must grow.
It was the convicted criminal Nick Leeson who was most Old Testament in his insistence that individuals must be punished for their misdeeds within corporations. At first blush, this seems to go against the feeling that arises from believing that corporate crime arises from good people doing bad things, bad decisions being made in groups and becoming normative, and subordinates knowing not to bring problems publicly to the attention of their bosses – all factors that the programme raised.
On the other hand, might it be that it is excusing and normalising the bad behaviour of the functionaries that allows us, by extension, to excuse the bad behaviour of executives and corporations? And politicians? I dunno. I’m beginning to think that this might be better examined in a 600-page satirical novel than a 600-word blog post. So while I’m working on that, why not check out the shredding at the end of this awesome track from my top tunes of 2017?
RAWK’N’ROLL, STROKE BLOKE!!!