Money matters. But is that all?

Recently, Bayer, a pharmaceuticals and chemicals behemoth, agreed to pay $10 billion to settle with thousands of claimants who had filed in court against the role of Roundup (a weedkiller product of the company) in inducing cancer. One would believe that if a company is shelling out such a huge sum, it reflects an obvious admission of the claims. But the company has maintained that the product is safe and better than alternatives.

The only reasons behind the settlement seem to be that the company wishes to do away with the negative publicity and the battering the stock price has taken. Purely transactional, one might say.

Moving on to another major case a few years back- Dieselgate. Volkswagen consciously installed devices that misled authorities into believing that their cars produced far lower emissions than reality. In some cases, nitrogen oxides emissions were as much as 40 times the permissible limit. Experts call it “defeat devices”- they detect if the vehicle is undergoing a pollution test and alter the performance accordingly. About 11 million vehicles were affected, worldwide. The scale is massive. Of course, the company paid about $25 billion in fines, vehicle refits and settlements.

There are numerous other examples of corporates settling to make the problems “go away”. Major drug manufacturers like GSK, Pfizer, Johnson & Johnson have all been involved in billion dollar settlements over misleading/false claims.

Damages done are probably irreversible. Society at large makes corporates pay for their actions that cause these damages in monetary terms. While rationale thought might agree that monetary cushioning is the only solution possible in such instances, is that all that can be done?

Don’t the judicial systems owe it to the people that corporates are not just given a smack on their income statements? Deliberate wrongdoing affecting hundreds and thousands warrants a heftier penalty. It is up to the courts to decide how but if every single misdoing is not met with serious non- pecuniary repercussions, corporations might not feel the pinch.