13:47, July 31 204 0 abajournal.com

2019-07-31 13:47:06
Ethics fix can stop CEOs from acting like sociopaths, former BigLaw lawyer says


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Jamie Gamble, a former partner at Simpson Thacher & Bartlett, has a problem with the legal obligation for corporate CEOs to make decisions that maximize corporate value.

That obligation requires CEOs to act like sociopaths, Gamble wrote in an essay at Medium.com.

“The corporate entity is obligated to care only about itself and to define what is good as what makes it more money,” Gamble wrote. “Pretty close to a textbook case of antisocial personality disorder. And corporate persons are the most powerful people in our world.”

But Gamble has a fix for the problem. In an interview with the New York Times, he proposes that public companies adopt a binding set of ethical rules, approved by shareholders, as part of their bylaws.

The rules would address the company’s relationships with employees, communities and customers, as well as the effects on the environment and future generations.

Government would have a role in the process in that it would require shareholders to explicitly state the ethical values of their corporations.

Shareholders could sue for violations of the ethics rules. To deter frivolous lawsuits, plaintiffs would have to show bad faith.

Gamble argues in his essay that as a result of his fix, each corporation “would reflect and be bound by the beliefs of its shareholders as to the behavior that will make it a responsible member of society. The aggregate of all that social power turned in more positive directions will make the world a better place.”