The Unaccountability Machine: Difference between revisions

==== Business administration is broken ====

{{drop|T|he epic judicial}} processes of 2024 have been Tom Hayes’ appeal against [[LIBOR rigging]], about which we have had much to say [[LIBOR rigging part 2|elsewhere]], and the [[Post Office Horizon IT scandal]]. Both are resolving to the question: to what extent can we put this absolute shower down to the nefarious, or just bone-headed, interventions of [[Operator|individual operators]].

Yet, much of the engineering of business administration — you hardly need an advanced degree in operations research to know these days, there’s a lot of it — exists specifically to prevent [[bad apple]]s, or [[stupid apple|''stupid'' apple]]s, subverting our complex modern organisations and systems.  

Much of modern business administration is a catalogue of a singular failure to achieve that basic end. Our [[roll of honour]] refers. LIBOR rigging and the sub-postmasters débâcle are but pinnacle examples. With all that infrastructure, superstructure and supervision how were a band of relatively lowly trading staff able to run riot? 

 

With all its infrastructure, internal and external legal advice, consultancy, and, er, second sight, how did ''no-one'' stop to think something must be wildly, catastrophically, wrong with the [[Post Office Horizon IT scandal|Post Office]]’s theory of the situation? How did no-one, even once, applying [[Otto’s razor]]?

{{drop|E|ither these are}} peculiar, localised problems — rogue gangs of [[Bad apple|bad apples]] plague the innocent houses of commerce — or the prevailing business administrative paradigm is in crisis and we need another theory of the game.  

 

Because it relieves executives of accountability and leaves only a deniable residue of responsibility for hiring them in the first place, “bad apples” is always the preferred diagnosis. The paradigm being in crisis, by contrast, suggests senior executives take credit for all the good stuff, dodge the rap when things go tits up and live a charmed life never being honestly marked to measure for anything. They are a waste of money, in other words.  

LIBOR submitters fit the “rogues gallery” identikit nicely. By making microscopic adjustments that no-one else would notice, they (allegedly) stood to make multimillion-pound bonuses for themselves. It was almost a victimless crime.  

The post office middle managers do not. If they had anything to gain personally from vilifying pillars of the community up and down the country, it was indirect and paled in comparison to the city bonuses on offer to the [[LIBOR]] submitters. These people do not seem psychopathic. Their motivations are not base. They do ''not'' resemble “bad apples”. They seem unremarkable, familiar, ''mediocre'' middle managers.  

Third — ''There but for the grace of God go I''. Post Office [[Inhouse counsel|in-house legal]] head Rodric Williams is a fifty-something expat New Zealander, whose career trajectory, in vector if not altitude, is strikingly similar to mine. In the halogen glare of cross-examined hindsight, his ineffectual interventions in an epic miscarriage of justice over an extended period are regrettable, but none of them resonate as ''odd''. Williams was adept at the sort of pencil-pushing, risk-averse [[buttocractic oath|buttocracy]] that is drilled by bitter experience into every single inhouse lawyer in the land. ''This is what inhouse counsel do''. This is how we behave. We should ask ourselves: knowing what ''he'' knew ''then'', ''would we have done any differently''? We should not kid ourselves here.  

{{Drop|W|hich brings us}}, finally, to Dan Davies’ fascinating new book. There is, he reports, a crisis of accountability in the modern commercial world: the relationship between “we” the general public and “we” the representatives and managers of the corporations which intermediate much of public life — many are on both sides of this equation, of course — his irreconcilably broken down. This is because modern corporations are designed to diffuse individual accountability for the actions a corporate legal entity takes, using what Davies calls “[[accountability sink]]s”. This is Davies’s example:

One creates an accountability sink by delegating the administration of a human process to a [[playbook|rulebook]] and then not giving anyone direct power to override it. Airlines, banks and online retailers of course have no access to anyone whatsoever. But the crushing stasis that anyone who works in financial services will know is a variety of the same thing.

 

And it explains exactly why noone saw, or appreciated the significance of or stopped to consider the implications of, the potentially incendiary advice they were receiving. ''it was not their job to second guess a process that had been set on rails well before they were involved''. They were like those furious ice-sweepers in the sport of curling — the policy having been set and launched, it had momentum, and their job was to purely ''facilitate its prosecution''. It was no part of their role to ''impede'' its stately progress. From an immediate career path perspective, the ''last'' thing these drones would want is to create ructions further up the [[line manager|chain of command]].  

 

In organisations over a certain size there is a presumption, not lightly rebuttable, that others in the organisation know what they are doing. This is its own [[accountability sink]]. Questioning a decision that appears to have been made elsewhere — whether by application of rigid policy or the exercise of someone else’s discretion — is to sell a ''personal'' [[put option]] whose benefit, if there is one, accrues to the organisation, but whose loss allocates solely to you. If you turn out to be right, someone else carries the can, if you’re not, you will. Either way, you have lost a friend.

Your only upside is avoiding an unthinkably remote tail risk: that some day, years from now, the entire shabby affair will be exposed and all participants held to public account before the watching eye of the internet. Even then if you end up at even money you will be lucky.

Bear in mind, too, that these people are paid partisans. Litigation in the common law world is an adversarial process. It is not a fact-finding enquiry. Yes, there are standards of disclosure and honesty required of witnesses but, upon finding weakness in a witness, the litigants instinct is not to instantly concede defeat but to find a better witness. The theory of the case rarely

A special mention of the ultimate flimsiness of [[legal professional privilege]] here. Some people who ''really'' ought to know better put in writing some ''extraordinary'' things. The misjudgment seemed so total until you realise that, normally , this class of communications ''would never see the light of day'', barred from view by the deep magic of [[litigation privilege]].

Individuals are, therefore ''positively disincentivised'' couraged from raising their hands.

We should not underestimate the overwhelming power of ''[[plausible deniability]]''.

====The role of in-house counsel====

There is an argument, unstated in much commentary on the case, that the primary role of [[in-house counsel]] — of not just the [[GC]] when preparing briefings to the board, but all lawyers in the organisation, whatever they happen to be doing— is to act as the organisation’s moral conscience. They, even more so than their [[compliance]] colleagues, are ideally positioned to sit above the fray, from where they can interrogate the organisation’s baser commercial instincts, at least at points where they manifest in legal work product.