Please let me know how would you, if called to arbiter this issue, would resolve it.
Taking a leaf form the recent catastrophe in Hungary, suppose that ACME inc. is operating a nuclear plant. Its CEO in 1990 was John, who agreed to dump all of the company’s nuclear waste (not a fast breeder reactor, obviously) in some mine, not that deep. In 2010, when Andy is the new CEO, subterranean waters begin to transport nuclear dust to the area, causing massive crop failures and sickness. Assume Andy know about the waste but moving it elsewhere would be too costly now.
Now, who would be responsible? John, Andy or the shareholders (in 1990, 2010, or else?)?
Not shareholders. That would be like saying the United States’ population is responsible for the government’s actions. Now, assuming we’re in a free market and ACME Incorporated doesn’t have its own ‘rights’ as a corporation-person like they do now, it would be John’s responsibility. If ACME was John’s business and he sold the business to Andy, then he should have received enough compensation from selling the company (i.e. the rest of the active bombs, if any, the machinery, etc.) that he could handle anything afterwards. If there is a board of directors and it wasn’t personally John’s business, meaning he didn’t sell the company, instead simply ‘moving down’, it isn’t his responsibility because he was, for lack of better words, a puppet for the board of directors. It would then become the responsibility of the board of directors. However, if there is no board of directors and ACME has corporation-person rights like they do now, it is Andy’s responsibility because the choice wasn’t John’s before, it was ACME’s. Therefore Andy must, in the name of the company, clean up the mess, which will entail firing a lot of people, but that doesn’t really matter because they don’t have a right to the job and the shareholder’s took a risk buying the shares in the first place.