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this post was submitted on 18 Oct 2024
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Sure, the "reasonable person" would be a competitor who generally follows standard operating procedures. If they're lagging behind the industry in safety or something, that's evidence of criminal negligence.
And yes, the C-suite should absolutely be the first to look at, but the problem could very well come from someone in the middle trying to make their department look better than it is and lying to the C-suites. C-suites have a fiduciary responsibility to the shareholders, whereas their reports don't, so they can have very different motivations.
The c-suites have the ultimate power and therefore ultimate responsibility for whatever happens in their organization. Similar to how parents can be held criminally liable for their children's actions. It's just that much more incentive for them to make sure things are in order in their organization.
Also, Citizen's United ruled that corporations are people, so they can be held to the same standards of responsibility as other people.
It's a pretty limited liability, as can be seen in a lot of incidents (e.g. mass shootings). You have to prove a pretty high standard of negligence for a parent to be responsible for their kids' actions.
The same should be true for anyone else as well, if the C-suite is unaware that something negligent or illegal was going on two levels below, they shouldn't be held liable for that. You should only be liable for a crime that you are aware of, or should have been aware of if you were doing your due diligence. But yes, in many cases, the C-suites should be held to task here.
That's the thing though...I think it is part of their due diligence to know what's going on in their own business. If they can't guarantee that it's safe, they shouldn't release it.
If their reports are lying to them, and not in a way that they should have detected, then I don't think it falls on them if things go sideways. And that happens somewhat regularly, when you have a VP or something somewhere painting a much rosier picture that what is actually happening on the ground.
At that point, it comes down to a call on whether they were negligent.