Policies in Conflict: Undermining Corporate Self-Policing

Abstract

This article addresses one of the foremost, yet mostly unrecognized barriers to the development of effective compliance and ethics programs in organizations: the existing legal system. While much has been made of government efforts to promote and recognize compliance and ethics programs, almost no attention has been given to an undercurrent in the legal system that has thwarted organizational self-policing, and that threatens to undermine the policy basis for promoting effective compliance and ethics programs.

The article begins with a brief overview of the history of the field of compliance and ethics and the policy reasons for its development. It then reviews the policy conflicts between the existing legal system and the application of compliance and ethics. It surveys weaknesses in current approaches to implementing compliance and ethics programs that undercut the effectiveness of such programs. In the conclusion it discusses how to balance the conflicting policies, ending with proposed legislation to resolve the conflict.

Keywords: compliance programs, compliance and ethics, sentencing guidelines, ISO, anti-corruption, bribery

JEL Classification: K