What are the arguments against imposing liability on corporations?

Question

What will be an ideal response?

Answer 1

The following are arguments against imposing liability on corporations:
1. Imposing fines on corporations is a waste of time and effort because the fines are never going to be severe enough to act as a deterrent. Even if more substantial fines were imposed, the firms would simply pass on the losses to consumers in the form of increased product prices. Thus, it would really be the consumers of the corporation's products who would be punished.
2. Some people believe that the shareholders' dividends may be reduced if fines are imposed on the corporation because the cost of the fines will reduce the profits available for dividend payments. Reducing dividends, it is argued, is unfair because in most corporations, the shareholders really do not have any power to control corporate behavior.
3. Because criminal prosecutions of corporations are not well publicized, they do not harm the corporation's public image. The corporations have enough money and public relations personnel to easily overcome any negative publicity with a well-run advertising campaign designed to polish their public image. For example, the prosecution of Revco of Ohio for defrauding Medicaid of hundreds of thousands of dollars resulted in only a temporary decline in the value of Revco's stock.