LETTER: Time to re-examine corporate law

HARDLY a week goes by without a new set of allegations of unethical behaviour from companies large and small.

Generally speaking, joint stock corporations have a tendency towards thwarting competition when they can, and tilting the balance of advantage against the consumer when they are able to do so. Recently, leading members of the Government have suggested corporations which have behaved improperly could face a fine.

This approach may play well to the gallery of the tabloid press with their simplistic headlines of “crackdowns” and “getting tough”, but when a corporate entity is given a fine the money to pay this comes from the income of the business, and that income comes from the customers who purchase the product or service. Thus we reach the absurd position of insult being added to injury since customers are effectively being fined for the misbehaviour of the corporation.

Perhaps the time has come to re-examine corporate law so that when a corporation receives a fine, it must be paid personally by the directors and the shareholders. The howls of protest from vested interests to such a proposal would be long and loud, which suggests this may have real merit, but I can assure you this would be a far better way of developing corporate character and raising standards of behaviour in business than the current approach of formalised codes of practice and lofty statements about business ethics.

KEVIN Hey

Castle Road, Colne