Abstract

http://ssrn.com/abstract=2309498
 


 



The Monitor-'Client' Relationship


Veronica Root


Notre Dame Law School

January 15, 2014

100 VIRGINIA LAW REVIEW 523-585
Notre Dame Legal Studies Paper No. 1440

Abstract:     
After the government discovers wrongdoing by a corporation, the corporation and the government often enter into an agreement stating that the corporation will retain a “monitor.” A corporate compliance monitor, unlike the gatekeeper, is not charged with “monitoring” the corporation in an attempt to detect and prevent wrongdoing. A monitor, unlike the probation officer, is not solely charged with ensuring that the corporation complies with a previously determined set of requirements. Instead, a corporate compliance monitor is responsible for (i) investigating the extent of the wrongdoing already detected and reported to the government, (ii) discovering the cause of the corporation’s compliance failure, and (iii) analyzing the corporation’s business needs against the appropriate legal and regulatory requirements. A monitor then provides recommendations to the corporation and the government meant to assist the corporation in its efforts to improve its legal and regulatory compliance — the monitor engages in legal counseling. The ad hoc structure of monitorships has, however, failed to facilitate the monitor’s function as a legal counselor. This failure is largely the result of structuring monitorships in an environment lacking binding rules and conceiving of monitorships as if a monitor’s only function is that of a governmental agent.

Yet the current monitorship structure is not necessary to achieve the monitorship’s goal, which is to establish a corporate compliance structure that deters and prevents future misconduct. This Article argues that providing a set of clear, enforceable, predictable rules regarding the scope of monitorships that facilitate a monitor’s function as a legal counselor will improve the long-term effectiveness of monitorships. This Article suggests one mechanism for achieving this goal — a statutory privilege — aimed at encouraging a formalized relationship amongst a monitor, the government, and the corporation, which re-conceptualizes the relationship as “The Monitor-‘Client’ Relationship.”

Number of Pages in PDF File: 65

Keywords: Compliance, Monitor, Corporations, Professional Responsibility

JEL Classification: K39, K20

Accepted Paper Series


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Date posted: August 13, 2013 ; Last revised: July 18, 2014

Suggested Citation

Root, Veronica, The Monitor-'Client' Relationship (January 15, 2014). 100 VIRGINIA LAW REVIEW 523-585; Notre Dame Legal Studies Paper No. 1440. Available at SSRN: http://ssrn.com/abstract=2309498

Contact Information

Veronica Root (Contact Author)
Notre Dame Law School ( email )
Department of Mathematics
Notre Dame, IN 46556-5646
United States
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