Folks. Publicly traded companies will ALWAYS compare the expected value of breaking the law with compliance.
Say it costs $100 million to follow the law. Breaking it comes with a $300 million fine, but only a 20% chance of getting caught.
They compare a 100% chance of paying $100 million to a 20% chance of paying $300 million.
Average cost of following the law: $100 million
Average cost of breaking it: $60 million
If we’re gonna do capitalism (which I would rather we not, for the record!), we have to make that expected value calculation break in favor of following regulations. If it is cheaper to break the law than to follow it, you’re not just losing money by complying: you’re giving ground to your competition. Fines need to be massive. Infractions need to get caught and punished. Executives need to be held personally accountable. Corporations need to be dissolved. Fines cannot be just the cost of doing business.
Folks. Publicly traded companies will ALWAYS compare the expected value of breaking the law with compliance.
Say it costs $100 million to follow the law. Breaking it comes with a $300 million fine, but only a 20% chance of getting caught.
They compare a 100% chance of paying $100 million to a 20% chance of paying $300 million.
Average cost of following the law: $100 million
Average cost of breaking it: $60 million
If we’re gonna do capitalism (which I would rather we not, for the record!), we have to make that expected value calculation break in favor of following regulations. If it is cheaper to break the law than to follow it, you’re not just losing money by complying: you’re giving ground to your competition. Fines need to be massive. Infractions need to get caught and punished. Executives need to be held personally accountable. Corporations need to be dissolved. Fines cannot be just the cost of doing business.