At times, corporations and their leaders fumble when assessing legal risks. The result is trouble – corruption, procurement fraud, securities violations, inflated earnings, and trade violations.
When it happens, it often results in criminal prosecutions, shareholder lawsuits, and negative media creating a perception that companies are filled with scoundrels.
Often the prosecutions, the lawsuits and the negative news is well-deserved. I have read formal complaints against companies or executives or settlement agreements that prosecutors reached with companies; and, found myself appalled by greed, poor judgment, weak character, and downright criminal behavior. Just because we see this wrongdoing occur at times, it does not mean though that all corporations are greed machines, or that their leaders are crooks.
Rather, big or small, corporations are made of people, and I think most people want to do the right thing. In my practice, I have worked with large, global organizations and small start-ups and have found that in many instances the leaders want to follow the law and to make ethical decisions while being fair to their employees; bringing us innovative solutions to complex problems; offering products and services we need; and generating economic growth.
Corporate leaders committed to legal and ethical decision-making, spend money, time, intellect, and energy to ensure that they get it right. At times, business leaders may push back and question their lawyer about the law and how its applied; they even may get angry about the law and having to follow it, but follow it they do. That type of questioning often brings better outcomes – and I love the debate.
Even so, business leaders do get it wrong but it is not easy to steer clear of problems: laws are complex, the global market is complex, and there are leaders and employees who are bad actors. I have spent many hours analyzing these reasons and have had many great discussions with mentors, friends, and colleagues – both lawyers and business people on this fascinating topic.
In When the Writ Hits the Fan, I will explore these issues – the intersection of law, business, criminal activity and ethics: why do some companies violate the law? what happens when they do? what is ethical? how do we get corporations to follow the law? can lawyers help and, if so, what is the lawyer’s role? Be sure to sign up for the newsletter to follow along!
A parting thought on what may be a partial explanation for corporate misdeeds:
“The ambitious climbs up high and perilous stairs, and never cares how to come down; the desire of rising hath swallowed up his fear of a fall.” — Thomas Adams