NCJ Number
126343
Date Published
1986
Length
32 pages
Annotation
Corporate wrongdoing is a serious, contemporary social problem, but economic efficiency is unsatisfactory as a guide to developing more effective sanctions against corporations.
Abstract
Corporate wrongdoing involves economic costs that greatly overshadow the economic costs of unlawful conduct by individuals acting on their own behalf. Monetary fines and penalties do not represent an effective form of punishment for corporate crime. They do not directly affect the managerial nerves of corporate governance, and they tend to inflict overspills on innocent workers, shareholders, and consumers. Corporations can be punished other than by monetary penalties and fines. Promising sanctions in this regard include stock dilution, probation and punitive injunctions, publicity orders, and community service orders. Although fines are advantageous in some respects, such as ease of administration, noninterference in the internal affairs of corporations, and contribution toward enforcement costs, they are subject to several limitations. They have minimal punitive impact, they devalue corporate crime seriousness, they compromise individual accountability, and they do not encourage responsive corporate reform. The suggested options of stock dilution, probation and punitive injunctions, adverse publicity, and community service can be developed to provide a flexible and potent array of sanctions. 99 footnotes