Question

) Should executives and directors be sent to jail for the acts of their corporation’s employees?

Answer 1

The company is generally run by the board of directors in line with the directions set up by the promoters and the owners of the company. The board of directors in turn set the direction for the corporation's employees to achieve a pre determined goal.

If the act of the employees is such that it brings harm and losses to the company or the third party then the employee shall be personally liable for that act. But if such act was conducted with the consent of the directors or the top executives of the company then apart from that employee, the directors and the executives shall also be liable for that.

The only rescue in such a situation for a director or an executive is to show that the act was conducted without his consent or that he withdrew the consent before the act was done. If the transaction was scheduled in such a way to deceive the third party or the company with the consent of the director, then the law making authority has the full right to lift the corporate veil and punish the director

Thus, in my views, the directors and the executive are held liable for jail if they too are involved in criminal liability or the act was done with their consent.