Consider J&J's (failed) attempt to spin out a new company to hold their liability over the talcum powder case. It was attacked and shot down because it was so clearly a post-hoc maneuver. If they had merely spun out that child company earlier, would it have been ok?
What if the new playbook is:
- spin out a new company for every potentially risky product line. A parent company may hold a large stake, but other investors can hold shares too.
- sell, grow revenue, but keep few assets in the company; pay out dividends aggressively
- drag out or quash or deny any research or evidence suggesting your product is dangerous, or being sold in an irresponsible way
- when you're finally sued and lose, the company has very little money left in it; plaintiffs get relatively little compensation for their harm, but you don't care because you're busy growing your next dangerous company
If that works, it sounds like a broken system. If you're doing something you should expect will cause large liabilities to crop up later, it seems abusive to pay out dividends to shareholders today and become insolvent tomorrow.
If you paid $100 for a share after the damage was done, who should pay? You, or the shareholder who sold to you?
In a relatively short period, the answer becomes "pretty much the whole economy benefited financially". On the one hand, that's a good argument in favor of partially funding the healthcare system via a financial transaction tax, but is also less emotionally satisfying than what you're looking for.
If you want to make long-term clawbacks practical, you need to do something like force all dividends to be paid as long-duration low-seniority zero-coupon corporate bonds backed by a special-purpose legal entity that holds cash/treasuries to fully back the bonds and can only be raided via bankruptcy hearings. That way, the value is kept non-fungible and risk explicitly tracked.
Though, in practice, equity holders would probably sell those bonds immediately on the market, offloading the risk to third parties. You could make the bonds non-transferable except in case of inheritance, and ban short-selling/creating derivatives to prevent transferring the risk, but that's a lot of complication and overhead with little chance of improving corporate behavior.
Ultimately, long-term corporate responsibility is much harder to enforce than long-term personal responsibility. You need a licensed Professional Engineer (or something similar) overseeing safety testing of the chemicals putting their personal career on the line with their stamp of approval. "If everyone's responsible, nobody is responsible." You need a mechanism to make individuals both responsible and legally empowered.
Just track everyone who has ever owned a share and confiscate their whole property.
you might as well propose “we should just snap our fingers and wish really hard for utopia”
