www.monbiot.com/2018/05/29/other-peoples-money/ Other People’s Money
29th May 2018
Make bosses pay for the disasters they cause
By George Monbiot, published in the Guardian 24th May 2018
Once more, they walk away. The senior bosses at Carillion, like those at RBS, Northern Rock and a host of other corporate zombies, went home to count their undiminished millions. The pain they inflicted was felt by others. Reckless greed paid out again.
The Commons report on this fiasco
The problem begins with an issue the report does not once mention: the extreme nature of limited liability. To allow the owners of a limited company to risk nothing but the money they have spent on shares is to grant them free, uncapped indemnity against the risks they impose on others. It’s the equivalent of permitting drivers to take to the roads without buying insurance, knowing that if they cause a crash they will carry no more than the cost of replacing their own car, regardless of the expense, injury and death they might impose on others.
The current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion
A recent study
Limited liability not only allows companies to act recklessly with regard to the interests of others – it obliges them to do so. Directors have a fiduciary duty to use all legally available means to maximise shareholder value. Limited liability compels them to externalise risk.
There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution
Various estimates put the cost that businesses dump on society at somewhere between 4%