When asked to identify the monsters that are most likely to damage humanity, most people would probably cite the climate crisis or the possibility of World War III erupting in the Middle East or on the Russia/Ukraine border. I think there is something far more dangerous going on. I think the real monsters are housed in the boardrooms of companies and corporations. The monsters are the directors of companies that do us harm.
Some companies are run by chief executive officers (CEOs) who have virtually personal control. They tend to be companies where the CEO is also the major shareholder, but a board of directors runs most companies. One director may be the CEO, but that individual can only operate within the boundaries set by the board. All directors are equally responsible for the actions of the company.
Do companies have a conscience?
Early medieval guilds were made up of craftsmen or merchants. Some of them grew into the early companies, predominantly to protect local monopolies. Some of the most powerful companies were created by Royal Charter to hold monopolies, such as the Royal Mint in 886 by Alfred the Great and, most notably, the East India Company in 1600 by Elizabeth I and the Dutch East India Company by the Netherlands in 1602. These were the first joint-stock companies whose shares could be bought and sold.
And in their creation, they were gifted with many aspects of a legal person. Companies can buy and sell, invest in and own other companies, enter into contracts and sue people and companies. And, whereas a human legal person, one hopes, is also endowed with a conscience, companies are not. The drive for profit and rising share prices contribute to some of them becoming monsters.
Not all companies are monsters. Many companies operate ethically: examples can be found via organisations such as Ethical Consumer. The ones below are not exhaustive: they are just among the most obvious examples.
Tobacco companies and lung cancer
The tobacco industry grew legitimately after Sir Walter Raleigh brought the product to Europe. The link to lung cancer was identified as early as the 1920s, more specifically in the 1940s and 1950s. The tobacco industry set about lying about it and revealed themselves as monsters. The ‘More Doctors Smoke Camels’ advertising campaign came from an industry that knew it was killing people.
Why do this? The obvious answer is the money.
Fossil fuel companies know what causes climate change
The fossil fuel industry has known from its own scientists, since at least 1959, that it was causing climate change, according to the records of the Energy and Man symposium. Shell has reports from 1962, Exxon’s records date back to 1977. And what did they do? Instead of trying to do something about it, the oil industry spent and continues to spend millions on denial and obfuscation. BP popularised the idea of a ‘carbon footprint’ , so you would know it was all your fault. And the appalling legacy of this industry still hangs in the world’s atmosphere and over places like the Niger delta.
Why? Perhaps because they can, because there is remarkably little restraint upon an organisation that is making money and funding politicians. Though, the millions donated by the fossil fuel industry is small compared to others such as pharmaceuticals and drug companies.
If you looked at the websites of fossil fuel firms, you would think their primary effort was being put into green and renewable energy. Many, like Exxon, have their fingers deep in green projects that are unlikely to ever make a difference.
These companies are unlikely to be prosecuted effectively anytime soon. The jurisprudence about climate change is only now being laid down internationally. For instance, in the recent decision of the ECHR on a case brought by a group of Swiss women that their government is not doing enough to avert climate change. It is not yet a crime in the UK for an energy company not to be keeping up with targets to reduce their carbon emissions.
But these are the obvious two industries. What else is out there?
Water companies put sewage in our rivers
The privatised water companies of the UK have turned this green and pleasant land into a cesspool. The worst example is probably Thames Water who make great publicity over the fact that they have not paid dividends to shareholders for some years, but have quietly paid almost £100mn in dividends to their parent company in just the last two years. Despite pumping raw sewage into every river and coastline they could find, they managed to pay £10.6mn to senior management in the last four years, including £3.7mn of bonuses and benefits.
They have paid £7.2bn in dividends over the last 32 years and are now £14.3bn in debt. As their shareholders refuse to fund them, they want to increase charges to customers by 40% and be fined less for dumping raw sewage. The figures are not as bad for the other privatised water companies, but they tell the same story.
How does this happen? Perhaps because the directors get tied into a belief that carrying on is the only way out. Perhaps because as directors they may have to walk away but will not lose the multi-million pound salary and bonuses paid over the years, nor their pension benefits – as did Sarah Bentley in July 2023.
The Post Office blamed sub-postmasters for faults in its computer system
The scandal of the Post Office is now the subject of an independent public enquiry. It is another tale of a corporate organisation that knew it had problems. Yet, instead of fixing them, it continued to blame, prosecute and persecute innocent people. Horizon, the accounting system produced by Fujitsu which lay at the heart of this, was flawed from its earliest installation. Executives of both Fujitsu and the Post Office, fully aware of its problems, happily gave evidence in court that the system was robust. They allowed innocent people to be convicted of theft. Others were coerced into making untrue confessions on lesser charges such as false accounting.
Not all the individuals involved were necessarily lying but, without doubt, directors of both companies knew the truth was not being told. Some MPs have claimed the Post Office misled government and has a case to answer for “corporate manslaughter”. Whether the public enquiry will recommend prosecutions of anyone, I do not know.
Why do we allow these directors to take the rewards but not to be held responsible for the consequences? It is possible that some of those concerned will be prosecuted for what they have done. Though, at best, very few will suffer any penalty as harsh as the sub-postmasters.
Industrial meat from animals reared in cruel conditions
I am an eater of meat and I have kept and slaughtered my own. Despite grass-fed and outdoor reared being better for the environment as well as the meat, more and more animals spend their entire lives in sheds, because it is cheaper. It is also cruel to the animals and the workers. I live in south-west France and, in recent years, two giant hen sheds have appeared a few kilometres away. Those birds will never see the light of day. Herds of goats that used to have fields to roam now spend most of the year confined in sheds.
One of the worst examples is the impact on the Wye river from a profusion of intensive poultry units. The river is being turned into a death trap for wildlife that relies on clean water to survive. In 2020 there were at least 500 farms with 44 million birds producing an enormous amount of excrement leaching into the river.
Some responsibility lies with the authorities that permit this level of concentration. But the companies that run these horror houses and appear to care not what impact they have, can only be described as monsters.
Gambling, pesticides, pharma – the list goes on
There are many other individual companies and entire industries whose behaviour falls into the ‘monsters’ bracket. The gambling industry seems to be working hard to addict customers to their slot machines in betting shops and online. There are American corporations doing all they can to use illegal immigration to keep wage bills down. The pesticide industry promotes overuse and seems oblivious to the harm its chemicals can cause. Many pharmaceutical companies spend far more on marketing than on research, but claim price hikes are essential to maintain the creation of new cures.
What do we do?
One of the most successful pieces of legislation in the UK was the Bribery Act 2010. It succeeded, not because it made bribery by companies illegal, but because it made company directors directly liable if employees facilitated bribery. So, because they could not use customers’ money to pay fines for illegal acts, directors managed and prevented their employees from bribing individuals and other companies.
A good model. Followed in 2017 by one of the rare but good things to come out of the premierships of David Cameron and Theresa May : the Criminal Finances Act 2017. This matched the Bribery Act in that it made directors liable for the acts of employees in facilitating tax evasion. Unfortunately, as yet it has never resulted in a prosecution. There are 11 open investigations, 10 of which have been open since at least 2019. This may explain some of the annual £35bn in taxes that are never collected.
What should we do?
If I deliberately gave or sold something to my neighbour that I knew had a good chance of causing them serious harm, I would be prosecuted. If I tipped the contents of my toilet in the Thames I would be prosecuted. If I made a false claim in court, I would be prosecuted. Why should company directors be exempt?
We could require companies to behave in ethical and environmental ways . However, fossil fuel companies claim they already are doing so, even as they do all they can to trash our climate, so this might be unenforceable.
The Bribery Act worked because it was followed up, so directors did their jobs properly. The Criminal Finances Act is a failure. The lesson is clear that laws alone are not the answer, laws followed by action might be.
The way forward
I contend that company directors should be allowed to earn their inordinate salaries and astonishing bonuses only if, at the same time, they take full and personal responsibility for the activities and the impact of their businesses.
Some directors, especially CEOs, have indemnity clauses written into their contracts to eliminate the possibility of them being held personally accountable. The law could be changed so such clauses become as unacceptable as would an indemnity for committing sexual assault upon employees.
If a company is fined for an environmental breach, participates in a prosecution that is overturned, knowingly acts in a way that harms individuals, or lies about the true impact of its activities, then fining the company is not enough. Nor should companies just pay vast sums to organisations or individuals when they are found in the wrong – such as Fox settling with Dominion or Monsanto (now Bayer) settling Roundup cancer lawsuits.
If companies are fined then the responsibility rests with the board of directors, all of them, jointly and severally. They should be held as liable as the company and fined or imprisoned as they would be under the Bribery Act 2010 and should be under the Criminal Finances Act 2017. And the defence of “I did not know” should be very limited. As directors they should know – it comes with the title and the remuneration package.
