Business Commons^™

The Market For Corporate Criminals, Andrew K. Jennings

Faculty Articles

This Article identifies problems and opportunities at the intersection of mergers and acquisitions (M&A) and corporate crime and compliance. In M&A, criminal successor liability is of particular importance, because it is quantitatively less predictable and qualitatively more threatening to buyers than successor liability in tort or contract. Private successor liability requires a buyer to bear bounded economic costs, which can in turn be reallocated to sellers via the contracting process. Criminal successor liability, however, threatens a buyer with non-indemnifiable and potentially ruinous punishment for another firm’s wrongful acts.

This threat may inhibit the marketability of businesses that have criminal exposure, …

Governance, Risk And Compliance (Grc) In Digital Transformation: Investor Views, Clarence Goh, Yuanto Kusnadi, Gary Pan, Poh Sun Seow

Research Collection School Of Accountancy

Companies are embracing digital transformation to enhance their competitiveness. Existing studies show that it is important for companies to manage the governance, risk, and compliance (GRC) aspects of their digital transformation initiatives. While companies are increasingly understanding the importance of the role of GRC in digital transformation, it is unclear from the investors’ views. Thus, this study examines whether investors are placing importance on the role of GRC in digital transformation for their investment decisions. The results show that investors care about the GRC aspects of digital transformation initiatives undertaken by companies. The findings of this study are consistent with …

Are All Risks Created Equal? Rethinking The Distinction Between Legal And Business Risk In Corporate Law, Adi Libson, Gideon Parchomovsky

All Faculty Scholarship

Should corporate legal risk be treated similarly to corporate business risks? Currently, the law draws a clear-cut distinction between the two sources of risk, permitting the latter type of risk and banning the former. As a result, fiduciaries are shielded from personal liability in the case of business risk and are entirely exposed to civil and criminal liability that arises from legal risk-taking. As corporate law theorists have underscored, the differential treatment of business and legal risk is highly problematic from the perspective of firms and shareholders. To begin with, legal risk cannot be completely averted or eliminated. More importantly, …

The Role Of Response Efficacy And Risk Aversion In Promoting Compliance During Crisis, Veronica L. Thomas, Hooman Mirahmad, Grace Kemper

Marketing Faculty Publications

This research examines consumers' compliance with behaviors that focus on preventing the spread of COVID‐19. Drawing on Protection Motivation Theory and research on efficacy, we find that, during a pandemic, consumers who have higher perceptions of response efficacy are less likely to engage in risky consumption behaviors (Study 1) and more likely to engage in protective consumption behaviors (Study 2). This effect is moderated by risk aversion, such that as risk aversion increases, COVID‐compliant behaviors increase even when consumers do not believe in their ability to effectuate change. Further, the relationship between response efficacy and COVID‐compliant behaviors is mediated by …

Deterrence Theory: Key Findings And Challenges, Alex Raskolnikov

Faculty Scholarship

This chapter reviews the key findings of the optimal deterrence theory and discusses the remaining challenges. Some of these challenges reflect current modeling choices and limitations. These include the treatment of the offender’s gains in the social welfare function; the design of the damages multiplier in a realistic, multi-period framework; the effects of different types of uncertainty on behavior; and the study of optional, imperfectly enforced, threshold-based regimes – that is, regimes that reflect the most common real-world regulatory setting. Other challenges arise because several key regulatory features and enforcement outcomes are inconsistent with the deterrence theory’s predictions and prescriptions. …

Blockchain And Insurance: A Review For Operations And Regulation, Richard Brophy

Articles

The purpose of this paper is to examine the operational and regulatory positions of the employment of Blockchain in the insurance industry. Blockchain technology has attracted wide interest from various stakeholders. Many theorists are predicting that this technology will disrupt financial services, including insurance. As stated that the development of blockchain is dependent on regulatory acceptance of this technology, it is essential to establish the current state of play with regard to the application and use of blockchain from a commercial and regulatory standpoints.

Inducing Compliance With Post-Market Studies For Drugs Under Fda’S Accelerated Approval Pathway, Liang Xu, Hui Zhao, Nicholas C. Petruzzi

Department of Supply Chain Management and Analytics: Faculty and Staff Publications

Problem definition: In 1992, FDA instituted the accelerated approval pathway (AP) to allow promising drugs to enter the market based on limited evidence of efficacy, thereby permitting manufacturers to verify true clinical benefits through post-market studies. However, most postmarket studies have not been completed as promised. We address this non-compliance problem.

Academic/Practical Relevance: The prevalence of this non-compliance problem poses considerable public health risk, thus compromising the original purpose of a well-intentioned AP initiative. We provide an internally consistent and implementable solution to the problem through a comprehensive analysis of the myriad complicating factors and tradeoffs facing FDA.

Methodology: We …

Complex Compliance Investigations, Veronica Root Martinez

Faculty Scholarship

Whether it is a financial institution like Wells Fargo, an automotive company like General Motors, a transportation company like Uber, or a religious organization like the Catholic Church, failing to properly prevent, detect, investigate, and remediate misconduct within an organization’s ranks can have devastating results. The importance of the compliance function is accepted within corporations, but the reality is that all types of organizations—private or public—must ensure their members com­ply with legal and regulatory mandates, industry standards, and internal norms and expectations. They must police thousands of members’ compli­ance with hundreds of laws. And when compliance failures occur at these …

More Meaningful Ethics, Veronica Root Martinez

Faculty Scholarship

Firms have exponentially increased their investment in the creation and implementation of ethics and compliance programs over the past fifteen years. The convergence of more robust corporate enforcement actions and more sophisticated industry standards and practices surrounding compliance efforts has created a booming compliance industry with commonly accepted standards and responsibilities. Within these efforts is a formal acknowledgment by the government, industry leaders, and academics that ethics has a role to play in helping to prevent misconduct within firms and that compliance without concern for ethics is insufficient. The reality, however, is that within firms’ efforts to implement effective ethics …

Management-Based Regulation, Cary Coglianese, Shana M. Starobin

All Faculty Scholarship

Environmental regulators have embraced management-based regulation as a flexible instrument for addressing a range of important problems often poorly addressed by other types of regulations. Under management-based regulation, regulated firms must engage in management-related activities oriented toward addressing targeted problems—such as planning and analysis to mitigate risk and the implementation of internal management systems geared towards continuous improvement. In contrast with more restrictive forms of regulation which can impose one-size-fits-all solutions, management-based regulation offers firms greater operational choice about how to solve regulatory problems, leveraging firms’ internal informational advantage to innovate and search for alternative measures to achieve the intended …

The Double-Edged Sword Of Jurisdictional Entrenchment: Explaining Human Resources Professionals’ Failed Strategic Repositioning, Kurt Sandholtz, Daisy Chung, Isaac Waisberg

Faculty Publications

To protect themselves against deskilling and obsolescence, professionals must periodically revise their claims to authority and expertise. Although we understand these dynamics in the broader system of professions, we have a less complete understanding of how this process unfolds in specific organizational contexts. Yet given the ubiquity of embedded professionals, this context is where jurisdictional shifts increasingly take place.Drawing on a comparative ethnographic study of human resources (HR) professionals in two engineering firms, we introduce the concept of jurisdictional entrenchment to explain the challenges embedded professionals face when they attempt to redefine their jurisdiction. Jurisdictional entrenchment describes a condition in …

The Outsized Influence Of The Fcpa?, Veronica Root Martinez

Faculty Scholarship

The current power and influence of the Foreign Corrupt Practices Act (“FCPA”) is really quite remarkable when one considers the statute was largely ignored for its first twenty-five years of existence. This statute, meant to reign in corruption by United States companies doing business abroad; has generated billions of dollars in revenue for the United States government; prompted the development of law firm practice groups and law school courses; become the subject of numerous scholarly articles; and has, arguably, made anti-bribery efforts the highest of priorities for multinational corporations engaged in robust compliance efforts. Corporations, scholars, and the public would …

The Compliance Process, Veronica Root

Faculty Scholarship

Even as regulators and prosecutors proclaim the importance of effective compliance programs, failures persist. Organizations fail to ensure that they and their agents comply with legal and regulatory requirements, industry practices, and their own internal policies and norms. From the companies that provide our news, to the financial institutions that serve as our bankers, to the corporations that make our cars, compliance programs fail to prevent misconduct each and every day. The causes of these compliance failures are multifaceted and include general enforcement deficiencies, difficulties associated with overseeing compliance programs within complex organizations, and failures to establish a culture of …

Corporate Oversight And Disobedience, Elizabeth Pollman

All Faculty Scholarship

Over a decade has passed since landmark Delaware corporate law decisions on oversight responsibility, and only a small handful of cases have survived a motion to dismiss. Scholars have puzzled over what it means to have the potential for corporate accountability lodged within the duty of good faith, but almost never brought to fruition in terms of trial liability.

This article explores the public-regarding purpose of the obedience and oversight duties in corporate law and provides a descriptive account of how they are applied in practice. The Article argues that the fidelity to external law required by the duty of …

Improving Revenue Capture And Patient Safety In An Icu Setting, Natasha Stankiewicz, Laura Lewis, Jonathan Archibald, Mark Parker, Suneela Nayak, Stephen Tyzik, Ruth Hanselman, Amy Sparks

Operational Transformation

IMPROVING REVENUE CAPTURE AND PATIENT SAEFTY IN AN INTENSIVE CARE SETTING

Materials management department is responsible for restocking chargeable supplies in an intensive care unit (ICU) at an academic tertiary medical center. Staff confusion as to what items were considered chargeable often led to low supply par levels resulting in delays of critical patient care.

Using baseline metrics, a team of caregivers created several performance improvement goals to increase nursing compliance with appropriate supply charging. The results of a root cause analysis spearheaded the development of a KPI that encompassed staff education, lost charge tracking and charge supply labeling.

Post …

Coordinating Compliance Incentives, Veronica Root

Faculty Scholarship

In today’s regulatory environment, a corporation engaged in wrongdoing can be sure of one thing: regulators will point to an ineffective compliance program as a key cause of institutional misconduct. The explosion in the importance of compliance is unsurprising given the emphasis that governmental actors — from the Department of Justice, to the Securities and Exchange Commission, to even the Commerce Department — place on the need for institutions to adopt “effective compliance programs.” The governmental actors that demand effective compliance programs, however, have narrow scopes of authority. DOJ Fraud handles violations of the Foreign Corrupt Practices Act, while the …

Foreword: Twenty-Eighth Annual Corporate Law Symposium: Rethinking Compliance, Felix B. Chang

Faculty Articles and Other Publications

The University of Cincinnati College of Law devoted its 28th Annual Corporate Law Center Symposium to compliance. It was a timely choice, coinciding not only with an explosion of sector regulation in recent years but also with shifting market realities for legal employment and legal education. The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the Patient Protection and Affordable Care Act are two prominent examples of major legislation that has added—and will continue to add—to compliance obligations for broad swathes of industries. Meanwhile, the financial crisis has spurred profound transformations in legal employment, including cutbacks in entry …

“Oversight Of The False Claims Act” Testimony By Professor Larry D. Thompson Before The U.S. House Of Representatives Judiciary Subcommittee On The Constitution And Civil Justice, Larry D. Thompson

Presentations and Speeches

Sibley Professor in Corporate and Business Law Larry D. Thompson testifies in a U.S. House of Representatives Judiciary Subcommittee on the Constitution and Civil Justice hearing on “Oversight of the False Claims Act.” The purpose of the hearing was to examine the act’s success and seek ways “to prevent, detect and eliminate false claims costing taxpayer dollars, while ensuring fair and just results.”

A Work System Perspective On Adoption Entities, Adoption Processes, And Post-Adoption Compliance And Noncompliance, Steven Alter

Business Analytics and Information Systems

This conceptual contribution responds to the invitation to the DIGIT 2015 Call for Papers “to reflect on and move forward from the dominant stream of research work on technology acceptance.” The dominant stream of research is basically about antecedents and correlates of adoption and continuation of use for hardware/software artifacts. This paper uses work system theory and several of its extensions to identify directions for adoption research that have been realized partially, but not nearly to the extent possible. It focuses on three general issues:

1) what adoption means in the context of work systems,

2) how adoption occurs, and …

Beneficial Noncompliance And Detrimental Compliance: Expected Paths To Unintended Consequences, Steven Alter

Business Analytics and Information Systems

This paper explores the possibility that compliance and noncompliance to process specifications, software usage procedures, business rules, and best practices could be beneficial or detrimental. After introducing different types of compliance and noncompliance, it uses a simple 2 x 2 matrix to postulate four types of situations: beneficial compliance, detrimental compliance, beneficial noncompliance, and detrimental noncompliance. It provides examples that illustrate subcategories within all four possibilities, thereby bringing into question the common assumption that compliance is beneficial and noncompliance is detrimental. It presents a model that explains decisions related to intentions toward compliance and noncompliance. It concludes with implications for …

Behavioral Ethics, Behavioral Compliance, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The design of an effective legal compliance system for an organization fearing prosecution for white-collar crime or regulatory violations requires skill at predicting human behavior. It is entirely plausible to use the economist’s simplifying assumptions of rational choice and pecuniary self-interest in making these predictions. But the realism of these assumptions has been under attack for decades now, suggesting that we should at least consider more nuanced behavioral possibilities when designing and implementing compliance programs. The label “behavioral compliance” can be attached to the design and management of compliance that draws from this wider range of behavioral predictions about individual …

Responsible Sales And Service Of Alcohol For The Tourism, Hospitality And Retail Industries, James Peter Murphy

Books/Book Chapters

The safe service of alcohol is of vital importance to those in the food and beverage industry - failure to act responsibly can result in fines, loss of license and the potential closure of the business. Responsible sale and service of alcohol (RSA) is important for all levels of the hospitality, tourism and retail service industries to minimise the risk of alcohol-related problems associated with the use and abuse of alcohol by any person. Management and all staff who sell or supply alcohol must promote and support a safer environment for alcohol to be consumed in a professional and responsible …

The Impact Of Demographic Factors On Tax Compliance Attitude And Behavior In Malaysia, Abdullah Al Mamun, Harry Entebang, Shazali Abu Mansor, Qaiser Rafique Yasser, Thurai Murugan Nathan

Faculty of Business - Papers (Archive)

This research explored the existence of differences in the impact of demographic factors on tax compliance attitude and behavior in Johor Bahru, Johor. The sample for the preliminary study is small which 92 respondents only and thus the optimum of the results is limited. The result of this investigation shows the ignorance of taw law among taxpayers in Johor Bahru, Johor may be a significant concern to the Government. Majority of the respondents agree that cash received for work dine is taxable but view bartering goods with a friend and not reporting it, though illegal, on their tax return as …

On-Market Share Buy-Backs: Asx Disclsoure, Jason David Mitchell, Holub M.

Research Collection School Of Accountancy

Our paper investigates the compliance of Australian listed firms with the ASX disclosure rules for on‐market share buy‐backs. We find that firm compliance is reasonable for initial buy‐back announcements, but poor for final buy‐back notices. In the latter instance, the disclosure in the appropriate ASX notice is provided in only 53% of cases. Of significant concern is the even lower degree of final notice compliance (42%) for buy‐backs tagged as having ‘unlimited’ duration. Across our total sample of 807 buy‐backs, an alternative form of disclosure of buy‐back completion is provided in 25% of cases, and no proper notification of either …

External Confirmation Of Adherence To Standards: As Applicable To Academic Programmes As To Business And Industry, Aaron W. Hughey, Monica G. Burke

Counseling & Student Affairs Faculty Publications

The development of, and adherence to, performance standards is imperative for success in today’s competitive global market. This is as true for academic programmes in higher education as it is for the manufacturing and service sectors. Just like their counterparts in business and industry, it is important that graduate career preparation programmes are subject to an external validation process that can substantiate whether or not they are indeed following applicable standards. In this paper the authors discuss the current status of accreditation for graduate programmes designed to prepare tomorrow’s leaders in the student services profession and argue for the development …

Automated Marketing: A Narrow Focus On Technology Or An Emerging Business Philosophy?, Edward Kasabov

Association of Marketing Theory and Practice Proceedings 2010

As a new area of academic inquiry, Automated Marketing is in its adolescence but has proved to be fast developing and very innovative, mirroring the relatively early stage of the development and application of the technologies that have enabled it. This article widens the understanding of this field of study, which is important both to practice and theory, by drawing attention to two deficiencies: not much has been written on Automated Marketing as such and the little that has been written adopts a narrow technical view while overlooking the significance and impact that it has on marketing, business strategy and …

Links Are Not Enough: Using Originality Reports To Improve Academic Standards, Compliance And Learning Outcomes Among Postgraduate Students, Grace Mccarthy, Ann M. Rogerson

Sydney Business School - Papers

Training students on the interpretation of originality reports generated by an electronic evaluation tool can assist with the reduction of unintentional plagiarism. An initial trial by the Sydney Business School, a postgraduate faculty of the University of Wollongong, has demonstrated that a proactive approach, based on pedagogical principles, can have a positive impact on the improvement of student writing skills when compared to a retributive justice approach reliant on a student’s ability and initiative in accessing internet support resources. This paper argues that higher education should not rely on links to internet based information, policies, and systems, to educate students …

Consumer Protection In An Era Of Globalization, Cary Coglianese, Adam M. Finkel, David T. Zaring

All Faculty Scholarship

With expanding global trade, the challenge of protecting consumers from unsafe food, pharmaceuticals, and consumer products has grown increasingly salient, necessitating the development of new policy ideas and analysis. This chapter introduces the book, Import Safety: Regulatory Governance in the Global Economy, a multidisciplinary project analyzing import safety problems and an array of innovative solutions to these problems. The challenge of protecting the public from unsafe imports arises from the sheer volume of global trade as well as the complexity of products being traded and the vast number of inputs each product contains. It is further compounded by the …

The Legitimising Power Of Regulation For Australian Banks: An Institutional Approach, H. Deo, Hemant J. Irvine, A. Abraham

Faculty of Commerce - Papers (Archive)

The history of the Australian banking system has been one of a striving for legitimacy, against a cycle of boom, bust and public antagonism. Despite a series of banking inquiries and ensuing regulatory reform, banks continue to announce unexpected results. Over the past 15 years, each of the four major Australian banks, while complying with the increasingly stringent requirements of regulatory bodies, reported at least one major financial blunder. An institutional perspective demonstrates that rules and regulations play a powerful legitimising role in assisting banks to maintain their public image in the face of such disasters.

Coso: More Relevant Now Than Ever, Heather M. Hermanson

Faculty and Research Publications

In 1992 when the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued its internal control framework, few would have guessed that the framework would become an integral part of corporate accountability a decade later, but things are moving in that direction. COSO's framework may become an important tool for implementing the directives set forth in the Sarbanes-Oxley Act of 2002. With the newly mandated reporting on controls and other directives set forth in the Sarbanes-Oxley Act, the full effect of COSO's internal control vision may finally be realized. COSO's framework may help to address compliance with the new …