By: Gregory VanderWoude, 3L, Journal Staff Member
Most readers are familiar with the apocryphal story of the explorer Cortes, who burned his fleet of ships upon arriving in the New World, as a means of forcibly motivating his crew by eliminating any means of retreat. See e.g., Mexonline.com, http://www.mexonline.com/hernan-cortez.htm. Although Cortes was no corporate executive, his tactical motivation proved effective. Mr. Zipes, in his note on Codes of Conduct that is set to be published in Michigan State University College of Law Journal of Business and Securities Law, Volume 15, Issue, proposes a similar tactic—motivating corporate executives to better police their companies by triggering an automatic reduction in pay if subordinate employees commit violations. Mr. Zipes explains, that by eliminating a scienter requirement, corporate agents are thus highly motivated to enact strict controls for subordinates’ actions. In the same vein, attorneys who draft opinion letters must disgorge their fees if their opinion letters are later cited to in criminal allegations.