The Dark Side of Compliance
Cambridge Handbook on Compliance (Forthcoming)
18 Pages Posted: 16 Sep 2019 Last revised: 8 Nov 2019
Date Written: September 10, 2019
Compliance — from the root “to comply” — is “the set of rules, principles, controls, authorities, offices, and practices designed to ensure that the organization conforms to external and internal norms.” But towards what ends does management use an organization’s compliance system?
Compliance ideally has aspirations to at least discourage outright violations of the law, if not to encourage ethical behavior more generally. The methods through which management enforces compliance, however, can increase unethical behavior within the corporation and have, in some cases, incubated and helped perpetuate illegal behavior. The paper explores this dark side of compliance, and how using tools of compliance can go wrong.
Keywords: compliance, data, monitoring, culture, norms, wrongdoing, wide-spread, corporate, corporations, board of directors, management, compliance officers, control, methods of control, pressure, incentives, goals
JEL Classification: K24, K20, K22, K29, K40, L21, L29, L50, L59
Suggested Citation: Suggested Citation