So the alternative is... we don't punish them at all? Bear in mind, CEOs face no real penalty for criminal activity.

This refers to the "normal" people not businesses or rich execs. Giving them for example 20 years instead of 5 doesn't change much, because 5 is already a lot. If someone does crime, because of poverty, being mentally ill, or because of addiction no jail time will be a strong enough deterrent.

If businesses actually would have fines that significantly hurt the business (and not being able to deduct it from taxes, if they were unable to pay, they would have to close down) would absolutely help and would change the calculation from fine being a cost of doing the business to a punishment for illegal behavior.

Having executives be personally responsible for decisions and go to a real jail would be even a stronger motivator.

The current problem is that there's no real deterrent.

> Most studies pretty clearly show that harsher punishments are not an effective deterrent.

It doesn't need to be harsh, 3 days in jail with a review in six months to see if they've fixed it. Then an additional 3 days in jail. Pretty much any jail time would be adequate for typical C-Level execs. Also, not "Raped in the ass" prison time, just a mellow 3 days to contemplate their shiftiness locked in a comfortable room.

That may be, but a threat of jail hanging over a director or CEO may make them take the correct course of action - effectively becoming the deterrent.

It won't. Again, this is well studied.

https://www.psychologytoday.com/us/blog/crime-and-punishment...

Your source doesn't actually apply well here. It talks about things like substance abuse and addiction being reasons that criminals don't act rationally to punishment as a deterrent. For white collar crime, there's a very different set of circumstances in play. Crime is often just a business decision based on risk and reward. Raise the risk and the reward becomes less worth going for.