I sort of like this line of reasoning. Though in penal contexts I'm against the death penalty and favour a rehabilitation based approach. So maybe if the government seized control the corporation for a time, to rehabilitate it?
I wouldn't. It may be simplistic but I think that the judiciary applying firm measures designed to protect the public and the biosphere, is the best approach.
It also depends though. Which government? I would have far lower credence in trusting the US government with this compared to some European governments that came out of a healthier democracy than the US. But that also goes for the regulations necessary for your less radical approach.
I could see that working in some areas, like military suppliers. Most of the time though it'd be bad to give the government any opportunity to generate profit from law enforcement actions. It could incentivize terrible behavior.
Ultimately most CEOs are probably psychopaths. What would be useful is banning psychopaths from there positions as they lack empathy.
Not sure if we can reliably tell who is a psychopath but it’s always going to be an issue.