Lol. I got nothing.

Don’t worry, you’ll get there.

I mean, if I were going to bet on speech patterns, I'd say you were not goofy anyway. You realise the whole betting thing was just to see what you'd say, right? Like, I cant bet on this.

100% not jman tho, I will take that prediction to the grave.

IKR ?

Saying it's their job to do so is one thing. But I can't imagine anyone willing to expose themselves to incarceration or personal bankruptcy for the privilege of doing so. That's just one step away from removing the shareholder liability shield and thinking companies won't have an issue attracting investors. Even if I'm wrong with that, the massive levels of cya oversight and compliance they'd impose would be crippling.

I understatand the objection and I appreciate none of the strangness about not being able to understand a really quite simpe idea.

I think you're objection is wrong though and part of the reason I gave the example of auditors is that it simply wasn't an issue when there was no limited liability. If they weren't satisfied that the accounts were a true and fair representation then they would not sign them. There was no problem of accountants refusing to work and yes audits were more comprehensive and expensive because of it - that's a good thing (exactly what the whole thing is supposed to achieve) and it wasn't crippling. This was good for the companies and shareholders as well. Obviously there were still crooks but most audit firms were extremely ethical.

The difference with shareholders liabiliy is that most shareholders have no ability to control the process and they dont even know what is going on beyond what they're told by the board/auditors/etc.

My issue is less with the particulars and the more general notion of requiring an affirmative defense in what amounts to an inquisition. What you're suggesting sounds like making it a crime for the police to not prevent crime and then requiring them to prove they weren't derelict in their duty in the event a crime is committed. I get holding people accountable or responsible and all that but we typically achieve that by firing them, preventing them from working in the field, etc., all under the general pretense of innocent until proven guilty, not sending them to jail or taking all their stuff if they can't prove they're innocent.

I undertand the attachment to the burden of proof being the other other way but the person has declared that they have checked thoroughly and there was no major crime. I'm suggesting criminal neglience is the default with evidence required to prove they weren't negligent or were involved.

Not a perfect analogy but it's a bit like getting caught with a load of drugs in a suitcase you declared that you packed yourself. The onus is sure gonna be on you to demonstrate someone else put them there and that you didnt know (far worse than negligence). Even if they found a load of stolen goods in my house it's in effect (although not strictly the law) going to me who has to prove I wasn't involved.

It doesn't have anything to do with brilliance. It's just sort of undeniable that a handful of schools (Harvard/Princeton/Stanford/MIT/Berkeley) have produced the founders of a large chunk of the Nasdaq (Facebook, Microsoft, Amazon, Google, Netflix, Intel, Apple). And there's dozens of companies you haven't heard of founded by people from these schools that are struggling for cash right now.

Free speech is good and regulations are evil. Just let the market sort it out what are you one of those do-gooders?

Right. And that makes sense in the suitcase analogy because it is extremely unlikely for a bunch of drugs to end up in your suitcase.

It is quite easy, on the other hand, for an executive to commit fraud without it being detectable by a board of directors exercising an appropriate level of diligence. Your response is going to be, "fine, so prove that you exercised appropriate diligence or go to jail." That's more difficult that it seems. But Everything seems easy to detect after you know what you should have been looking for.

Well firstly we dont know how often someone smuggling drugs puts them in a 'friends' case.

but the rest rest addresess the precise point and no, that's not my response at all. I dont agree that there's anywhere enough due dilligence and that often some do know what's is going on but it can't be proved. Make key people responsible and a) the level of due dilligence will rise significantly and b) the amount of fraud will go down significantly.

Maybe the difference betwen us is whether you think there's a problem to be addressed in the first place. Maybe you think there is enough due dilligence/honesty. I dont.

I'm sure that I have a lot more experience dealing with allegations of wrongdoing against corporate executives and board members than most people in this thread. I am under no illusions about whether accounting fraud and the like exists.

You can make whatever rules you want for board members. You can impose whatever penalties you want. But it won't change the fundamental facts. Outside board members are not close to full time employees. (In fact, outside directors are not employees at all.) They are not paid like full-time employees. In many cases, they are overseeing the operations and reviewing the financial statements for very complex companies. To a considerable extent, they must rely on management. If management is determined to hide impropriety from the board, it is exceedingly likely that it will succeed.

I'll put it this way. If you, chezlaw, had been an outside director of Enron back in the day, there is no better than a 1 in 1000 chance that you would have detected the major problems that ultimately brought down the company.

This is a long way of saying that management is in a much better position to prevent impropriety than outside board members are. Hanging board members from yardarms is likely to an ineffective tool for preventing fraud. You would do better to focus on penalties for management.

I dont think we disagree quite as much as you think. The aim is to bring these poeple and the key people closer to being the same people - at the top. There should be 1+ key people on the board for key areas and ordinary employees should not be where the buck stops.

I also think you think I'm trying to 'hang' more people. The reverse is true, as with ~all (I think it's actually all) of my political ideas the aim is to reduce the problem, not to prosecute more people.

I think you're somewhat wrong on Enron. The related problem with auditors take a lot of the blame. I dont believe there is anyway it would have happened under the audit regime as I used to work in. Not because I was brilliant but because the auditors did there job. In Enron's case it destroyed the auditors but as per the post above - it should never have happened at all and that should be the aim. And the auditors would have informed the board of their concerns so they would have known.

No doubt all your beliefs and thoughts make complete sense in your head, but when you then try to communicate them with posting here it is almost as if how the actual real world has no part in it. As odd as this sounds - I am not saying that to insult you, as I am not really familiar with your posts or posting history, but on this topic you literally are making no sense. Perhaps that is due to you having zero experience in the area you are discussing, but in the end it does not matter. Your perception of how companies and boards works is just an alternate reality. Not really sure what else to say as you clearly believe it and nothing will change that, so I guess continue believing it, but nothing you suggest will ever come close to happening in the actual real world, nor should it.

Well thank you but some of the things were introduced after Enron and although you may find this hard to believe, these issues were beind discussed by deluded fools like me long before Enron.

The CFO - who can be a board member now has to sign off the accountts. I think they should have to be on the board but it can currently be a special category. So does the CEO and they have to certify that the accounts fairly represent reality.
The problem of accountants not taken audits seriosuly was also addressed in part.

The SO act should never have been required in hindsight because the problems were not the remotest suprise, but there's never a shortage of people saying dont udnerstand and no change can happen. More change will happen - some of it in the right direction, maybe even most of it .

If you're saying the world will never be exactly run as I want. Well sure, I have no doubt that is very true and I've no doubt a very good thing. Bit of a paradox as I dont want the world run like I would like it to be run.

I also assume you're from the USA which is the not easiest meat for red blooded leftys. I have on several occasions hit the problem of people claiming things are impossible when they're quite normal elsewhere.

USA is not the county I expect to lead left wing progress although it can sometimes be suprising as we see with drug laws.

There is an argument that CEOs and CFOs shouldn't be on the board - maybe you can make it.

I don't know if this is real or not, but it made me laugh

Criminal negligence only applies to crimes against persons where some sort of personal injury or death occurs. For example, If a bank teller neglects to properly check id and cashes a bogus check, the teller isn't going to jail unless the state proves intent to defraud.
In addition to proving the guilty acts of your possession of illegal drugs or stolen goods in a house you alone occupied the state is also required to prove you knew the illegal drugs were in your suitcase or the goods were stolen. Of course they can do that through circumstantial evidence, basically establishing a 'how could you not have known' set of circumstances, but nonetheless the state is still required to prove that the accused had a guilty mind and knew they were committing a crime.

So ultimately you're arguing not for negligence but rather that directors are engaged in say a conspiracy to commit fraud without having to prove that they knew they were engaged in a conspiracy to commit fraud just because their qualifications and investigatory tools should have enabled them to discover the fraud. Point being that there aren't two crimes here, one of fraud and one of negligence, but instead just one crime of fraud involving two parties. And again, the state can establish through circumstances that they couldn't have possibly not known what was going on but that's still their burden, not the accused to prove that they didn't know what they didn't know.

We can argue semantics but I dont have any stake in what the crime is called. It's just a distinction from being fund guilty of being involved in the fraud. Here's a bit from the CPA journal that may provide a better basis for this conversation. The SO act was directly addressing the issues I am and in much the same direction. Some may think it's unnecessary or unworkable or like me that it needs to be built on.

Note that's different from being guilty of the fraud which is what I intend by negligence.

Which hopefully kills off the limited liability stuff.

http://archives.cpajournal.com/2003/...es/f073603.htm

Won't anyone think of the rich powerful board members

Yeah, the people on the vast majority of boards for typically smaller non profits are just filled with mustache twirling backroom boy fatcats looking to fleece an organization they have typically supported financially and/or with tons of hours of volunteer work. Standard long term play by these evil individuals.

For every board of a company like the one in this thread there are dozens or hundreds for organizations that have annual operating budgets of a million or less per year. May as well gut them of their ability to attract individuals (typically of those who support the organization financially) who could add a lot of value to how they are run since some of those individuals may not be poor enough in your eyes or something.

Would be kind of amusing if somehow computer simulations could exist where one could watch scenarios of how the world would turn out if donks like you had their beliefs implemented. Would make for some pretty amusing viewing.

All the best.

We don't need simulations. We know that every single socialist policy, endeavor, and country has resulted in overall benefits to people and society.

Well, you do lie literally all the time, but even if what you said is accurate by happenstance - the reality is that gutting boards would not help, since the vast majority are for relatively small organizations (often non-profit) that need that expertise (at no cost) to help them continue to operate. You pretend to care about the lower income portions of society, why not call up some organizations that support some of the people you want supported and ask how their organization would fare if they had to gut their board of directors and/or expose them to possible criminal charges. Ask them about their "rich powerful board members " or look them up if they have a website and you are more likely to see regular people who have put a lot of time and money in supporting that non-profit.

That's the problem with donks like you - you scream about this thread's specific board of directors and then apply it to every one that exists, when it is hardly indicative of a typical board of directors. I also suspect the term "board of directors" triggers you as well, much like the word "corporation" when the vast majority of "corporations" are essentially mom and pop shops. The fortunate solution to the problem is that what you say does not matter in the slightest.

All the best.

It's not merely the case that "they certify that the company’s books are accurate when they are not." The act also requires that they knew they were providing false or misleading information for the purpose of misleading, i.e., criminal intent or guilty mind. Ibid.:
So far from just semantics, the move from 'did know' to 'should have known' circumvents what has traditionally made a criminal act a crime in the first place: