The Dark Side of Compliance

Cambridge Handbook on Compliance (2021)

21 Pages Posted: 16 Sep 2019 Last revised: 24 Aug 2022

See all articles by J.S. Nelson

J.S. Nelson

University of Pittsburgh - School of Law; 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 aspirational goals 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. As with all other tools, the tools of compliance can be abused. This chapter explores management abuse of corporate compliance systems, and it provides a caution about the dark side of compliance.

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 Sandler (J.S.), The Dark Side of Compliance (September 10, 2019). Cambridge Handbook on Compliance (2021), Available at SSRN: https://ssrn.com/abstract=3451586 or http://dx.doi.org/10.2139/ssrn.3451586

Josephine Sandler (J.S.) Nelson (Contact Author)

University of Pittsburgh - School of Law ( email )

3900 Forbes Ave.
Pittsburgh, PA 15260
United States

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

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