The Dark Side of Compliance

Cambridge Handbook on Compliance (Forthcoming)

18 Pages Posted: 16 Sep 2019 Last revised: 8 Nov 2019

See all articles by J.S. Nelson

J.S. Nelson

Villanova Law School; Villanova School of Business; The Wharton School, University of Pennsylvania; Institute for Corruption Studies

Date Written: September 10, 2019

Abstract

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

Nelson, Josephine, The Dark Side of Compliance (September 10, 2019). Cambridge Handbook on Compliance (Forthcoming). Available at SSRN: https://ssrn.com/abstract=3451586 or http://dx.doi.org/10.2139/ssrn.3451586

Josephine Nelson (Contact Author)

Villanova Law School ( email )

299 N. Spring Mill Road
Villanova, PA 19085
United States

Villanova School of Business ( email )

800 Lancaster Avenue
Villanova, PA 19085-1678
United States

The Wharton School, University of Pennsylvania ( email )

3730 Walnut Street
Room 668 Jon M. Huntsman Hall
Philadelphia, PA 19104-6340
United States

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

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