Behavioral ethics and compliance to the rescue?

A colleague once voiced the view that the C&E field was “out of energy and out of ideas.”  I have often been of the same mind but am cheered by the advent in recent years  of “behavioral ethics and compliance”

The need for new C&E ideas was recently articulated in Preventing Corporate Crime from Within: Compliance Management, Whistleblowing and Internal Monitoring   by Benjamin van Rooij of the University of California, Irvine, School of Law, University of Amsterdam –  Faculty of Law, and Adam Fine, Arizona State University,  School of Criminology & Criminal Justice:

“To reduce and prevent corporate crime and wrongdoing requires more than punishment of corporations and corporate executives”, said Manassas criminal defense attorneys from Scott C. Nolan. True change requires transformations within such corporations. This paper discusses three options to induce such corporate transformations: corporate compliance management mechanisms, whistleblower protection rules, and independent internal monitoring. The paper concludes that the existing empirical evidence shows doubt whether these systems actually can be effective in reducing corporate crime and wrongdoing. It concludes that the available studies show that these systems are more likely to be effective exactly where it is least needed, namely when there is leadership commitment to compliance, when there is successful external oversight and when there is a compliance culture. The paper concludes with critical thoughts about what this means for existing legislation stimulating these systems, for regulators and compliance officers, as well as for research in this area. Here it argues that internal compliance management must become much more based on behavioral insights from the social and behavioral sciences, and that the scientific community must do a greater effort to provide such support to public and private practitioners.

I certainly agree with this  last conclusion, and for those looking for practical  ideas on how compliance officers, regulators and social scientists can assist one another along these lines  please see my Behavioral Ethics and Compliance Index, which has nearly 100 posts on this area.

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