also believed in majority rule and the implementation of as much democracy as possible. He assumed that businesslike rationality could solve all human problems. On the other hand, Bentham has been much criticized for his failure to account for or to understand any human emotion other than rational self-interest. As John Stuart Mill pointed out in a famous essay, Bentham seemed not to understand honor, personal dignity, artistic passion, or human desires for perfection, order, power, and action. “Knowing so little of human feelings,” Mill wrote, Bentham “knew still less of the influences by which those feelings are formed . . . and no one . . . who . . . ever attempted to give a rule to all human conduct, set out with a more limited conception of either of the agencies by which human conduct is or of those by which it should be influenced.”
CHAPTER 5: ETHICS AND BUSINESS DECISION MAKING 87 C. C ORPORATE S OCIAL R ESPONSIBILITY The question of corporate social responsibility concerns the extent to which a corporation should act ethically and be accountable to society in that regard. C ASE S YNOPSIS — Case 5.2: Fog Cutter Capital Group Inc. v. Securities and Exchange Commission With family members, Andrew Wiederhorn controlled more than 50 percent of the stock of Fog Cutter Capital Group. If Wiederhorn was terminated “for cause,” he was entitled only to his salary. If terminated “without cause,” he would be owed three times his $350,000 annual salary, three times his largest annual bonus from the previous three years, and any unpaid salary and bonus. “Cause” included the conviction of a felony. When Wiederhorn became the target of an investigation into the collapse of another firm, Fog Cutter redefined “cause” in his termination agreement to cover only a felony involving Fog Cutter . Wiederhorn agreed to plead guilty to two felonies, serve time in prison, and pay $2 million to the collapsed firm. Fog Cutter agreed that while he was in prison, he would keep his title, responsibilities, salary, bonuses, and other benefits. It also agreed to a $2 million “leave of absence payment.” The NASD delisted Fog Cutter from the Nasdaq. Fog Cutter appealed to the Securities and Exchange Commission, which dismissed the appeal. Fog Cutter appealed. The U.S. Court of Appeals for the District of Columbia Circuit denied the petition. The SEC’s dismissal was not “arbitrary, capricious, or an abuse of discretion.” Fog Cutter’s deals with Wiederhorn indicated that he had “thorough control” over the firm, which had done nothing to check his conduct.