The simplest thing for a company to do when faced with a nightmare scenario
like that in the hypothetical on page 3 - and a perfect storm of interest by the
plaintiffs' bar, regulators, prosecutors and the media - is to surrender - fire
the CEO or other executives, change business practices, withdraw products or
services from the market, settle the civil cases or do whatever else it takes to
get back into the good graces of the governmental authority as quickly as
possible and keep the company viable and the stock price level.
Today it is indeed the rare company or general counsel who will risk his or
her client's reputation or viability by saying "I'll see you in court." Good
people, lawful practices, valuable products and services and sound public policy
informed by generations of prudential and careful consideration - all are at
risk depending on how much faith we place in a very few people with enormous
power. The swing of the pendulum to date and its arc and direction are not
hopeful signs. We are in a position of having to rely not upon the law but
rather the good faith of men and women, in authority to exercise self-restraint
and objectivity as they demonstrate a devotion to sound and articulated public
policy. Our founding fathers would have found this not only unacceptable but,
based upon their experience, hopelessly naïve and unreliable.
William B. Lytton is Executive Vice President and
General Counsel of Tyco International and a former President of the Association
of Corporate Counsel.