Initially, I'll consider the position of a CEO.

It is necessary to decide exactly who the CEO is responsible to and for what purposes. This is where the first conflict arises. Here's the list in no particular order:

1. the state in respect of criminal acts (i.e. criminal responsibility)
2. the state in respect of regulations (i.e. regulatory responsibility)
3. customers in respect of product liability (tort) and contractual issues in the civil courts
4. employees in respect of welfare, terms and conditions
5. bondholders and other lenders
6. shareholders and, of course,
7. the court of public opinion as described by keyboard warriors and hashtags in addition to media.

Shareholders expect maximum profit. Most expect that to be done legally. Many, but not as many, expect it to be done ethically. That means that responsibility to them is voluntarily subjugated to responsibilities 1, 2 and, at least in part, 7 because the court of public opinion is where ethical issues are most likely to be put under a magnifying glass.

But responsibility to employees is very much a matter of where, geographically, the company operates: increasingly, the topic of employees' welfare, pay and conditions is being regarded as a matter of ethics. This means that the interests of shareholders may become secondary to the interests of employees, at least in some respects. Ethical treatment of workers in foreign plants and overseas contractors is required, at least in relation to the making of so-called "modern slavery" statements, although how much difference that has made has yet to be demonstrated with cases of mistreatment in technology and textile companies often coming to public attention in many locations. In addition, there are questions of whether the company complies with its obligations to workers in relation to e.g. statutory pay scales and whether it pays its staff what is sometimes called "a living wage." In this there is a cross-over between legal obligations and ethics with, increasingly, public opinion being on the side of workers who are by any reasonable definition underpaid. In this area, there is a clear conflict with shareholders who frequently demand that expenses are heavily constrained and staff costs are, often, the easiest to minimise by a variety of techniques. There are other matters relating to employees including Health and Safety which falls into criminal conduct, regulatory matters, civil liability and, of course, ethics.

Health and Safety is a complex subject: it is often decided retrospectively by a tribunal which presumes that the company is at fault in the case of an injury at work. Several cases in the UK in the past few months appear to be placing a near-absolute duty on employers, failing to consider that employees often take risks of their own volition.

The conflict between shareholders and the company's obligations under the criminal law are often highly visible, particularly in relation to environmental offences. But there are less visible aspects, too, such as breaches of sanctions. This is an example of where there is a cross-over between the criminal law and regulatory affairs.

A very significant issue in criminal matters is that where an offence requires a state of mind. Companies (as distinct from their officers) do not have a state of mind and, therefore, the company cannot be found guilty. Increasingly, legislation is looking for ways to get around this problem. An example is "corporate manslaughter" - which is not the fudge that it might appear for the simple reason that, while murder requires "malice aforethought," manslaughter does not require any specific state of mind. It is not necessary to prove, for example, negligence. Indeed, manslaughter is tailor-made for unintentional conduct.

If we were to look at the offence of money laundering, for example, it requires that "a person" - so that can include legal persons i.e companies - has possession, custody or control of assets derived from criminal conduct commits the offence of money laundering IF that person believes, or has reasonable cause to believe, that the assets are indeed so derived. It brings us back to the old question: if a vending machine takes your money but does not deliver the product, is it theft? Can a machine form "dishonestly?.

The solution is, of course, to create a regime in which specific officers are named as "responsible officers" or some such. While this has been in place in many countries for several years, it's usually been in relation to specific officers in specific industries - the most common being financial services. However, criminal responsibility of individuals is gaining ground. You can read this article by a highly regarded barrister, Quentin Hunt in which he explains the position (in 2015 and it may have changed) in England and Wales : https://www.bestcriminaldefenc....

In all of this, the position of bondholders has been left out of account. They, unlike other lenders, often have seats on a board. They, too, are in a position of conflict because they need to make sure they get paid and therefore inevitably will argue for profits above other discretionary matters. To decide exactly what is discretionary is at the nub of the problem. Much profitable business is done close to the edge of what is, for one reason or another, unacceptable. But all too often, the line is blurred, or there is a significant grey area in which the answer to the obvious question addressed to lawyers is "it may or may not be illegal, we don't know for sure because it's never been tested in Court. It's up to you whether you take the risk." That, essentially, is what happened in the old Guinness case in which, later, the Chairman and three others were convicted of criminal offences relating to share manipulation.

Given, then, that even if only one area of management falls to an individual, there are complex conflicts to be managed, the next question is whether it is reasonable for a single person to know everything that happens in the company. There is precedent: some years ago, an Australian court (I cannot, now, find the authority) found that, in relation to an Australian company, a director who lived and worked in the UK and attended board meetings in Australia from time to time was nevertheless responsible in relation to the company's actions. A director is a director is a director, it seems.

If one extends that to an increasingly highly complex regulatory regime (not only financial services sector regulation) it would seem that under Australian company law as defined in precedent, every director is liable for every failure no matter what department it happens in. The notion of joint responsibility for all directors has not been widely tested but it is a fairly logical direction from where we are today.

The problems with that are both obvious and legion. But, again, there is at least some form of precedent: around the world, in professional firms (when they were firms not some kind of limited arrangement), the responsibility for failure, both legal and financial, fell on all the partners. If one looks at the position of solicitors in England and Wales, the Solicitors' Regulatory Authority takes the view that, even where there are limited companies (erroneously called "firms") that directors are treated as if they were partners and that managing partners, or their equivalent, carry the can for failures. But action is also taken against those in specific positions of responsibility for e.g. compliance as well as those who fail in their professional conduct or standards.