Is this just something corporations cannot do (per UCC)? Management wants tellers to be able to do this for all businesses but corporations. Would the risk only be having to compile copies of checks for a subpoena?
The ONLY business payees that a bank should consider cashing checks for are sole proprietorships, and then only for the individual who is the sole proprietor (SP), not for anyone else who is authorized to sign on the SP's account. That's because the business and the SP are one person under the law. The same cannot be said for LLCs, LP, partnerships, LLPs, associations or other entities.
If management has experience dealing with bank policies as a teller, it would also recognize that having a special rule for SPs can create training and "in the trenches" confusion, since it can be a challenge for a teller to understand the difference between an SP and a business entity, and even more of a challenge to determine whether a given business customer is an SP or an entity.
I recommend a "no cashing checks payable to businesses" policy and a reminder to SPs that if they want to be able to cash checks they receive in their business operations, they can ask that the issuers make checks payable to the individual SP rather than to the business name.