Personhood, Procedure and the Endurance of Corporate Compliance

Research Handbook on Corporate Purpose and Personhood (Elizabeth Pollman and Robert B. Thompson, eds.; Elgar, 2021)

Brooklyn Law School, Legal Studies Paper No. 689

23 Pages Posted: 10 Sep 2021 Last revised: 17 Dec 2021

Date Written: September 8, 2021

Abstract

Over the past century, the Supreme Court has erected a framework of constitutional criminal procedure that greatly eases the government’s burden in enforcing the substantive laws that regulate corporations and business entities. Although it may be difficult to hold corporate wrongdoers accountable for their misconduct, constitutional criminal procedure is rarely the reason.

Corporate criminal procedure’s ground rules arise from the Supreme Court's interpretation of both the Fourth and Fifth Amendments. Its Fourth Amendment decisions permit government enforcers to avoid search warrants and instead serve broadly worded subpoenas on corporations. Its Fifth Amendment precedents deprive business entities of the privilege against self-incrimination.

As technology reshapes society’s attitudes about government power, these rules are apt to change. Buoyed by the Court’s affirmation of a strong, rights-based vision of corporate personhood, new procedural rules may eventually eclipse the current government-friendly framework. If so, this new equilibrium carries important implications for corporate compliance.

For the past three decades, the government has successfully induced corporations to develop internal compliance programs, whose obligations span from policing the company’s employees to inculcating pro-social norms. To the extent compliance improves the firm’s internal governance and operational efforts, compliance remains inherently valuable to the firm. But because its benefits develop over the long-term and are difficult to verify, compliance requires the external pressure of enforcement proceedings and criminal prosecutions.

The aim of this Chapter is to explore what happens when that outside pressure abates. If constitutional theories of personhood and procedure converge in a way to undermine government enforcement, how does the corresponding enforcement gap affect the corporation’s internal policing mechanism? Have corporate officers and employees so internalized compliance’s lessons that external pressure no longer matters? Or is compliance a highly elastic concept, poised to disappear as soon as enforcement becomes encumbered by procedural hurdles? What we know thus far ought to inspire competing feelings of concern and optimism.

Keywords: corporate personhood, compliance, corporate crime, criminal procedure, collective entity, 5th Amendment, 4th Amendment, subpoenas, ESG, public enforcement

JEL Classification: K14, K22, K42

Suggested Citation

Baer, Miriam H., Personhood, Procedure and the Endurance of Corporate Compliance (September 8, 2021). Research Handbook on Corporate Purpose and Personhood (Elizabeth Pollman and Robert B. Thompson, eds.; Elgar, 2021), Brooklyn Law School, Legal Studies Paper No. 689, Available at SSRN: https://ssrn.com/abstract=3919908

Miriam H. Baer (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

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