06/06/2014

Brady Dougan is the quintessential, successful, modern man

Brady Dougan is the quintessential, successful, modern man. Dynamic, wealthy, media-savvy, he is at the head of one of the world’s largest banks. He is the envy of an entire generation who want to be sitting on the top of the corporate totem pole. He has it made. His total compensation package for 2013 was close to $10 million.

Mr. Dougan testified before a United States Senate Committee. During his testimony he made two simple statements that are perfectly clear, and totally contradictory. 


First, he admitted that the bank he directs, Credit Suisse, had purposefully helped American clients avoid paying taxes, a rather serious offense in the United States. Second, he said that he was unaware of or responsible for the actions of some people working at the bank. “Some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management,” Dougan said during his testimony in Washington DC.

Is it reasonable to expect Brady Dougan to be aware of what all the employees at Credit Suisse are doing? In this case, as evidence showed, there was a certain awareness if not policy from the top concerning the illegal practice. But that’s not my point. My point is that in his testimony Mr. Dougan was able to disassociate himself from the activities of his employees.

One of the cleverest modern inventions is the legal concept of Societé Anonyme. It allows a corporation to disassociate itself from individual responsibility. In the case of Brady Dougan, for example, Credit Suisse will pay the fine while Brady Dougan as its head had not been held accountable. Some underlings may be punished, but personal responsibility has been reduced. That is the aim of SA, to depersonalize responsibility. Would the same be true in other societies, such as in Japan? Would the head of a large corporation in Japan have said the same contradictory statements?

In a classic article, John C. Coffee wrote that the modern corporation has ”No Soul to Damn: No Body to Kick”. While we talk of corporate social responsibility when a corporation like Rolex is active philanthropically, we should also focus on corporate irresponsibility when someone like Brady Dougan at Credit Suisse hides behind a veil of ignorance, of not knowing.

Modern societies are highly complex. We now have large institutions that are highly decentralized with diffused power. Not all are corporations. In Geneva there are numerous intergovernmental as well as nongovernmental organizations. They are not SA’s. Is it fair to ask questions about their responsibility as well? Who was responsible for the genocide in Rwanda? Cambodia? The assassinations in Srebrenica? I don’t mean the actual perpetrators, but those who had influence and could have acted differently. What responsibility does the UN have for what happened in Rwanda? The civil war continues in Syria. Over 100,000 have been killed, millions have been displaced. Is the United Nations responsible for not stopping the fighting? The United States for not arming the opposition?

Modern man is faced with complex belongings. There are the obvious face-to-face relations. But beyond intimate relations, there are societal relations that are much less obvious. Am I responsible to stop muggers when they enter a tram where I am seated and attack one of the other passengers? What is my responsibility when I see two people fighting in the street, or drugs being illegally sold on the corner? Because of the vast variety of modern belongings we more and more disassociate ourselves from these situations. We are less and less involved; we have become individually anonymous, just like modern corporations. We prioritize legal responsibility at the cost of moral responsibility.

Brady Dougan is the quintessential, successful, modern man. Dynamic, wealthy, media-savvy, he is at the head of one of the world’s largest banks. He is the envy of an entire generation who want to be sitting on the top of the corporate totem pole. He has it made. He is totally irresponsible, a walking SA.

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