The "design" is sensitive to which liabilities are limited for whom.
Shielding marginal or non-voting investors from disproportionate responsibility for things essentially out of their control transfers risk from them, and makes it easier to move money to useful places. That's great!
Shielding key decision-makers and large-stake owners from responsibility for actions performed at their behest is not so much. And in fact, the pure "design" of limited liability has means for "piercing the veil" and keeping these individuals responsible and for wholly disolving corporate charters.
It just turns out that once commercial enterprise grows big enough, or is steered by influential enough leadership, capturing regulation and enforcement to serve their own interests, they can undermine those safeguards and assert a kind of wholesale corporate immortality and immunity that completely undermines the "design" -- a bug in the implementation of that design, if you would.
Shielding marginal or non-voting investors from disproportionate responsibility for things essentially out of their control transfers risk from them, and makes it easier to move money to useful places. That's great!
Shielding key decision-makers and large-stake owners from responsibility for actions performed at their behest is not so much. And in fact, the pure "design" of limited liability has means for "piercing the veil" and keeping these individuals responsible and for wholly disolving corporate charters.
It just turns out that once commercial enterprise grows big enough, or is steered by influential enough leadership, capturing regulation and enforcement to serve their own interests, they can undermine those safeguards and assert a kind of wholesale corporate immortality and immunity that completely undermines the "design" -- a bug in the implementation of that design, if you would.