In Search of Effective Ethics & Compliance Programs
Maurice E. Stucke
University of Tennessee College of Law; The Konkurrenz Group
December 10, 2013
39 Journal of Corporation Law 769 (2014)
University of Tennessee Legal Studies Research Paper No. 229
The U.S. Sentencing Commission's Organizational Guidelines for over twenty years have offered firms a significant financial incentive to develop an ethical organizational culture. Nonetheless, corporate crime persists. Too many ethics programs remain ineffective.
As this Article explores, the Guidelines' current approach is not working. The evidence, including sentencing data over the past twenty years, reveals that few firms have effective ethics and compliance programs. Nor is there much hope that the Guidelines' incentive will induce companies, after the economic crisis, to become more ethical.
The problem is not attributable to three assumptions underlying the Guidelines. The empirical research, while still developing, suggests that compliance efforts can be effective, and that effective compliance is attainable.
Instead the problem is likely attributable in part to the fourth assumption. This Article explores how the Guidelines’ extrinsic, incentive-based approach to compliance does not cure, and likely contributes to, the problem.
Number of Pages in PDF File: 64
Keywords: Organizational Guidelines, compliance, ethics, antitrust, FCPA, organizational culture, intrinsic motivation, behavioral economics
JEL Classification: K21, K14, K42, L40
Date posted: December 12, 2013 ; Last revised: November 9, 2014