Leadership in the Time of So-Called Regulation -- Has Compliance Been a Dangerous Corporate Legal Strategy All Along?

Abstract

Regulatory change ranks #2 on the list of concerns named by 4,410 global CEOs PwC surveyed for its 2023 CEO Survey. More than half those polled believe that regulatory change will either increase or decrease their industry’s profitability “to a large extent” or “to a very large extent” in the coming ten years.

How might such regulatory change impact corporate compliance programs? That’s a question. Yet for any CEO who’s looking to lead an organization to its brightest future, and who understands organizations move in the direction of the questions they ask, the better question to ask might be one that looks well past compliance.

Do corporations have responsibility beyond compliance—i.e., responsibility for addressing harms and injustices relating to their business model but not made unlawful by regulation? This article makes the case that they do, not as a matter of charity or ethics, but rather as a matter of self-interest.

Keywords: regulation, corporate governance, leadership

JEL Classification: k20, k22, k23