Corporations must be forced to act lawfully

There is only one kind of crime where a finding of guilt does not involve anyone being held accountable, where sanctions are specifically designed not to interfere with the financial interests of the guilty and where the perpetrator is all-but free to fail to comply with the redress ordered.

It is large organisational and corporate crime, and we see it today in the news that Network Rail, guilty of criminal charges over three deaths due to a derailment, does not appear to have fulfilled the conditions of the package of redress imposed on it.

When a large organisation is found to have breached the law it is generally taken to be a collective failure in which no individual person is seen as being solely responsible for the decisions made and so it is assumed that no individual should be personally held accountable unless they can be shown to be solely personally responsible.

That means that the sanctions are all for the organisation itself – and if the organisation is an large employer which is in a position to continue trading, the argument will always be made that the many staff who were not responsible for the decision would potentially suffer (including losing their jobs) if sanctions are too punitive.

This means that the official position is often that no individual should be held accountable because it was a collective decision but that the organisation shouldn't be held collectively accountable because there are many in the organisation who were not involved in the decision-making. No charges against any individual person are levelled and the fine is calibrated to not risk the financial operation of the organisation.

This places a lot of weight on redress – actions imposed on the organisation to ensure it does not happen again. This, in the Scottish parlance, is one of the variations on 'lessons must be learned'. It is a way of saying that what happened is bad but rather than 'dwell on the past' we must 'look to the future'.

This redress is imposed either by courts or by regulatory agencies. But the reality of redress is that it is entirely as effective as the monitoring and enforcement carried out by the agencies which imposed it. This returns us to a recurrent problem in Scottish politics – if the only outcome of failure is 'learning lessons for the future', how is this enforced and measured?

There is a simple yet perverse hypocrisy involve in this. Agencies like Network Rail (which is government-owned but arms-length) and lightly-regulated corporations exist because of an ideology that states that only self-interest gets the best out of people. That has created a system with low monitoring of individual actions and large rewards for individuals.

The logical corollary of that would be that the best way to avoid catastrophic failure would be to hold people personally accountable for it. Given that self-interest is the relevant driver here, the self-interest of not serving jail time would surely be the coherent way to minimise failure under that ideology?

Inevitably, that's not what happens. The powerful create lopsided ideologies that benefit them in one direction but never threaten their interests in the other.

There is a legitimate debate about the proportionality of corporate accountability and corporate homicide legislation. There is always a risk of scapegoating and it is wrong not to acknowledge that some decisions legitimately are collective or group decisions.

But these are collective decisions made inside an organisational culture which is set from the top. If staff are making reckless or incompetent decisions, they are doing so in a corporate culture which enables and permits it.

There are some steps that might be taken. Above all, the politicians are so heavily lobbied by these big organisations that the one thing we know is that we cannot rely on the politicians to hold those responsible to account. Once again, Common Weal feels that we need a lobby-free Citizens' Assembly as a second chamber of the Scottish Parliament acting for the public, not the politicians.

When a 'lessons must be learned' statement is made, the statement should include precisely the lessons that must be learned and a timetable in which it should happen. It should be automatic for the Citizens' Assembly to then have to review evidence that all lessons are implemented at that point.

There is a very strong case for greater individual managerial responsibility. Corporate homicide laws have yet to lead to a single imprisonment in Britain. There are stages prior to imprisonment. Perhaps there should be legislation forcing the person identified as responsible to be sacked and to forfeit any financial package resulting.

Alternatively, if the goal is not to imprison people but to force change to happen, perhaps senior executives should be found guilty and sentenced accordingly, but with a suspended sentence subject to all actions of redress being completed in a given timescale which, if not done, would result in the sentence being enacted.

One way or another, the last 40 years has been a repeated tale of corporate failure and lack of accountability and very few steps have been taken to hold people accountable or change the organisational culture in Britain. People die as a result.