This document summarizes a presentation given by Michele DeStefano at a meeting in Munich, Germany in October 2014. The presentation discusses the evolution of corporate compliance programs in the United States and challenges faced by Chief Compliance Officers. It also hypothesizes that efforts to increase compliance, transparency, and visibility through measures like separating compliance from legal departments may be "cloudy at best" and not achieve their objectives. The document outlines arguments for why departmentalization may not increase actual compliance, transparency, or visibility and entrenchment of compliance programs. It concludes by recommending corporations look inward at decision-making processes and culture beneath formal structures.
De stefano, Global Lawyers + Global Law Schools: Entering the Innovation Tour...Michele DeStefano
This presentation will highlight recent trends in the global legal marketplace that are impacting what and how lawyers practice and what and how legal educators teach. It will make some predictions about the future ecosystem of the legal profession that will transform the way lawyers and business professionals partner together to solve problems. From a practical standpoint, the presentation will identify the skills the lawyers of tomorrow need to hone in order to successfully navigate this new landscape and suggest ways legal educators and law firms can help the lawyers of tomorrow hone these skills.
DeStefano, Extrapreneurs, Interdependence, & a Law Without WallsMichele DeStefano
Today, two questions are commonly asked by professionals in the United States law market: 1) When are legal educators going to start training our law students with the skills to be the global 21st Century lawyers of tomorrow? and 2) When is legal practice going to innovate to tackle the challenges of our “new” global marketplace? At the heart of these two questions is the assumption that it is not legal education’s responsibility to change the way law is practiced and that it is not practicing lawyers’ responsibility to change the way future lawyers are educated in law school. It is this assumption that I intend to challenge here.
Specifically, I will argue that although there has been recent innovation in legal education and practice, the answer to law’s problems lies, in part, in changing the relationship between legal education and practice. I will argue that the relationship between legal education and practice should be based on a model of extrapreneurship, interdependence, and collaboration. The relationship should be an iterative partnership with a mentality of law without walls
The Future Legal Marketplace: Innovation, Extrapreneurship, and a Law Withou...Michele DeStefano
This presentation starts by identifying current trends and significant shifts in the law market within and outside the U.S. that are accelerating the adoption of technology and the need for innovation in legal practice and education. It then highlights some examples of innovations in how legal services are being provided and how legal education is being taught. Ultimately,it suggests some potential paths our occupation should consider taking in the future.
On 9 May 2017, Ross Waugh talked about "Ethics" to Selwyn District Council Young Professionals.
Ross discusses the IPENZ (Institute of Professional Engineers New Zealand) Code of Ethical Conduct. He also cited the IPWEA Code of Ethics, among others.
Ross presents case studies and provides some examples and insights on ethical issues surrounding professional engineering and district council practices.
Each year, student teams are assigned a “Project of Worth”. Their task is to create an innovative startup solving a real problem in legal education or practice. Here is a list of the 2016 Projects of Worth.
De stefano, Global Lawyers + Global Law Schools: Entering the Innovation Tour...Michele DeStefano
This presentation will highlight recent trends in the global legal marketplace that are impacting what and how lawyers practice and what and how legal educators teach. It will make some predictions about the future ecosystem of the legal profession that will transform the way lawyers and business professionals partner together to solve problems. From a practical standpoint, the presentation will identify the skills the lawyers of tomorrow need to hone in order to successfully navigate this new landscape and suggest ways legal educators and law firms can help the lawyers of tomorrow hone these skills.
DeStefano, Extrapreneurs, Interdependence, & a Law Without WallsMichele DeStefano
Today, two questions are commonly asked by professionals in the United States law market: 1) When are legal educators going to start training our law students with the skills to be the global 21st Century lawyers of tomorrow? and 2) When is legal practice going to innovate to tackle the challenges of our “new” global marketplace? At the heart of these two questions is the assumption that it is not legal education’s responsibility to change the way law is practiced and that it is not practicing lawyers’ responsibility to change the way future lawyers are educated in law school. It is this assumption that I intend to challenge here.
Specifically, I will argue that although there has been recent innovation in legal education and practice, the answer to law’s problems lies, in part, in changing the relationship between legal education and practice. I will argue that the relationship between legal education and practice should be based on a model of extrapreneurship, interdependence, and collaboration. The relationship should be an iterative partnership with a mentality of law without walls
The Future Legal Marketplace: Innovation, Extrapreneurship, and a Law Withou...Michele DeStefano
This presentation starts by identifying current trends and significant shifts in the law market within and outside the U.S. that are accelerating the adoption of technology and the need for innovation in legal practice and education. It then highlights some examples of innovations in how legal services are being provided and how legal education is being taught. Ultimately,it suggests some potential paths our occupation should consider taking in the future.
On 9 May 2017, Ross Waugh talked about "Ethics" to Selwyn District Council Young Professionals.
Ross discusses the IPENZ (Institute of Professional Engineers New Zealand) Code of Ethical Conduct. He also cited the IPWEA Code of Ethics, among others.
Ross presents case studies and provides some examples and insights on ethical issues surrounding professional engineering and district council practices.
Each year, student teams are assigned a “Project of Worth”. Their task is to create an innovative startup solving a real problem in legal education or practice. Here is a list of the 2016 Projects of Worth.
Integrated next-generation technologies may equip students to continue their education their entire lives, and can address three goals: fortifying student skills, increasing education’s ROI, and enabling students to be innovative and entrepreneurial. Education technology providers will likely need to shift their focus from content to connections.
Download the full Deloitte Review article here: http://deloi.tt/2wfvlnd
American consumers are starting to feel better about the economy and growing supply of domestic energy resources, but they remain committed to reducing their electricity consumption, according to the Deloitte Resources 2015 Study. The survey of more than 1,500 household decision makers finds consumers have largely focused on basic tactics to cut their energy use and are not following through on their intentions to invest in more capital-intensive measures such as rooftop solar panels or smart energy apps. Nonetheless, their interest in more advanced energy management tactics persists, creating opportunities for electricity providers who can make the right offer.
To learn more, visit www.deloitte.com/us/resources
The value shift: Why CFOs should lead the charge in the digital age - Infogra...Deloitte United States
The Value Shift: Why CFOs Should Lead the Charge in the Digital Age
Given CFOs’ fiduciary responsibility to deliver shareholder value, it makes sense that they should be leaders in digital business model innovation. When the evidence shows that each marginal dollar can be spent to generate value at a multiplier of 1, 2, 4, or 8 times revenue.
For more - visit http://www2.deloitte.com/us/en/pages/finance/articles/cfo-insights-digital-age-business-model-innovation-value.html
Presentation at Harvard Law School: Evolution of Elite Law Firm model and Ris...Michael Moradzadeh
Presentation to be given at Harvard Law School on the evolution of the elite law firm model, what brought about recent changes, and alternatives that have been rising up since 2008.
Enforcement actions in the banking industry: Trends and lessons learnedDeloitte United States
Regulators issue hundreds of enforcement actions to banks each year. Recent research sheds light on current trends in the number, type, and severity of these actions, with implications for ways that banks may be able to better anticipate and respond to them. Read this infographic and read more here: http://dupress.com/articles/bank-enforcement-actions-trends-in-banking-industry/?icid=hp:ft:01.
MACPA Annual Meeting and Town Hall Professional Issues Update took place on June 18, 2015 at JHU in Rockville, MD. With a love audience of 165+ and another 200 via webcast it set a new record.
This includes the polls held during the session that identified the demographics, top challenges, and other key information from the membership.
A presentation given at the Louisiana State Bar Association's annual Solo, Small Firm, and Tech conference held on February 15 and 16, 2018. The presentation featured the "Legal Tech Disrupters" and how to analyze newly emerging ethics issues.
This presentation covers a legal perspective of CSR and potential liabilities for companies and directors. The emphasis on CSR being voluntary may have characterised the mainstream approach to CSR prior to the turn of the millennium. This is no longer the case
This interactive webinar will give you a live, guided demo of ELT’s online Ethics & Code of Conduct training program, discuss the laws that mandate training, and provide a practical overview of best training practices.
Online ethics training programs have become critical to many organization’s compliance and risk management strategies. Legal mandates over the past decade have significantly reduced fines and penalties for organizations that train employees on their Code. The regulatory environment continues intensify, demanding increased accountability and transparency from employers.
More than ever, organizations have a strong incentive to build both an ethical culture and effective compliance programs – to reduce risk, to avoid litigation, to build defenses and to create tangible value. Enterprise-wide employee education is central to this effort.
Integrated next-generation technologies may equip students to continue their education their entire lives, and can address three goals: fortifying student skills, increasing education’s ROI, and enabling students to be innovative and entrepreneurial. Education technology providers will likely need to shift their focus from content to connections.
Download the full Deloitte Review article here: http://deloi.tt/2wfvlnd
American consumers are starting to feel better about the economy and growing supply of domestic energy resources, but they remain committed to reducing their electricity consumption, according to the Deloitte Resources 2015 Study. The survey of more than 1,500 household decision makers finds consumers have largely focused on basic tactics to cut their energy use and are not following through on their intentions to invest in more capital-intensive measures such as rooftop solar panels or smart energy apps. Nonetheless, their interest in more advanced energy management tactics persists, creating opportunities for electricity providers who can make the right offer.
To learn more, visit www.deloitte.com/us/resources
The value shift: Why CFOs should lead the charge in the digital age - Infogra...Deloitte United States
The Value Shift: Why CFOs Should Lead the Charge in the Digital Age
Given CFOs’ fiduciary responsibility to deliver shareholder value, it makes sense that they should be leaders in digital business model innovation. When the evidence shows that each marginal dollar can be spent to generate value at a multiplier of 1, 2, 4, or 8 times revenue.
For more - visit http://www2.deloitte.com/us/en/pages/finance/articles/cfo-insights-digital-age-business-model-innovation-value.html
Presentation at Harvard Law School: Evolution of Elite Law Firm model and Ris...Michael Moradzadeh
Presentation to be given at Harvard Law School on the evolution of the elite law firm model, what brought about recent changes, and alternatives that have been rising up since 2008.
Enforcement actions in the banking industry: Trends and lessons learnedDeloitte United States
Regulators issue hundreds of enforcement actions to banks each year. Recent research sheds light on current trends in the number, type, and severity of these actions, with implications for ways that banks may be able to better anticipate and respond to them. Read this infographic and read more here: http://dupress.com/articles/bank-enforcement-actions-trends-in-banking-industry/?icid=hp:ft:01.
MACPA Annual Meeting and Town Hall Professional Issues Update took place on June 18, 2015 at JHU in Rockville, MD. With a love audience of 165+ and another 200 via webcast it set a new record.
This includes the polls held during the session that identified the demographics, top challenges, and other key information from the membership.
A presentation given at the Louisiana State Bar Association's annual Solo, Small Firm, and Tech conference held on February 15 and 16, 2018. The presentation featured the "Legal Tech Disrupters" and how to analyze newly emerging ethics issues.
This presentation covers a legal perspective of CSR and potential liabilities for companies and directors. The emphasis on CSR being voluntary may have characterised the mainstream approach to CSR prior to the turn of the millennium. This is no longer the case
This interactive webinar will give you a live, guided demo of ELT’s online Ethics & Code of Conduct training program, discuss the laws that mandate training, and provide a practical overview of best training practices.
Online ethics training programs have become critical to many organization’s compliance and risk management strategies. Legal mandates over the past decade have significantly reduced fines and penalties for organizations that train employees on their Code. The regulatory environment continues intensify, demanding increased accountability and transparency from employers.
More than ever, organizations have a strong incentive to build both an ethical culture and effective compliance programs – to reduce risk, to avoid litigation, to build defenses and to create tangible value. Enterprise-wide employee education is central to this effort.
The Evolving Role of the Chief Compliance OfficerConvercent
The role of a Chief Compliance Officer is becoming increasingly complicated. CCOs must keep an eye on new and old regulations, litigation trends, industry best practices and budgets. They need to be accountable to the board of directors, federal regulators, stakeholders and employees. They are constantly working to align the compliance program to the company’s unique risk profile, strategic business plan, internal and external influences and more.
In short, being a Chief Compliance Officer is no easy task. In this hour long webinar, our panelists will discuss the challenges and opportunities CCOs face in this evolving landscape and highlight components of an effective compliance program.
See full webinar: http://www.convercent.com/resources/webinar-the-evolving-role-of-the-chief-compliance-officer/
Creating the Governance ability to apply information and technology in raising the firm performance by enhancing the Board's capacity to direct and control through a set of rules, practices, and processes.
What’s in a Name of an Ethics CodeRead Consider What’s in a N.docxsusanschei
What’s in a Name of an Ethics Code?
Read Consider: What’s in a Name of an Ethics Code? in Chapter 9, then answer these following questions from the text:
· Describe how the title of a company’s ethics document affects your attitude about the content?. Do you find one title more attractive than another?
· Describe the message that the title “code of conduct” conveys?. Does it reflect the purpose of the document to provide employee guidance on expected conduct?
· Propose creative titles for ethics codes for a pharmaceutical company and a restaurant. (Gonzalez-Padron, 2015).
· Identify two other company ethics documents and share the titles of their ethics documents (consider your own organization or one that you are familiar with for this question).
Your response must be a minimum of 300 words.
Discussion 2
Code of Conduct in Medical Tourism
Medical Tourism has become a growing industry, especially in developing countries. Research the topic of medical tourism, and find a scholarly or credible article for your topic. Develop a code of conduct for medical tourism. Your code of conduct must include
· Organizational values
· Guidelines for acceptable behavior
· Compliance with legislation
· Examples of prohibited acts
Your response must be a minimum of 300 words.
Use at least one scholarly or credible source.
· The Scholarly, Peer Reviewed, and Other Credible Sources table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.
9 Implementing an Ethics Program
Bloomberg/Getty Images
Learning Outcomes
After reading this chapter, you should be able to do the following:
• Explain how an organization can structure and manage an ethics program.
• Develop a code of conduct that articulates standards to company stakeholders.
• Create an ethics training and communications plan.
• Evaluate mechanisms for obtaining advice on ethical issues and reporting ethical misconduct.
• Design an effective monitoring and auditing system.
ped82162_09_c09_255-294.indd 255 4/23/15 8:47 AM
Introduction
Introduction
Ethics Program Pays Off for Morgan Stanley
On April 25, 2012, Garth Peterson, former managing director for Morgan Stanley’s real estate
business in China, pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) and for
conspiring to evade Morgan Stanley’s internal controls for meeting securities laws for invest-
ment advisers (United States Department of Justice, 2012). From 2004 to 2007, Peterson
cultivated a relationship with a Chinese official to obtain business approvals. In 2008, execu-
tives at Morgan Stanley discovered the violations, reported them to the U.S. Securities and
Exchange Commission (SEC), and fired Peterson (Lucchetti & Kendall, 2012). Department of
Justice of.
ESG and Compliance: Where do we go from here?Nimonik
Environment, Social and Governance (ESG) issues are taking on more and more presence in the corporation's planning and strategy. This presentation discusses emerging trends, potential paths forward and challenges with staying in compliance to the myriad of ESG standards and requirements.
Personal Finance Professional Ethics & Standards of Practice - A Professional...milfamln
This webinar covers a high level introduction to the subject of ethics as a primer for understanding the basics of ethics (for those who may not have had any previous formal education or training in ethics). This will help to serve as a framework for approaching the discussion of case studies. A number of brief case studies will be presented, and participants will be given an opportunity to respond in text to questions posed about each case study, including how they might respond in these situations. We will then consider and discuss the case study scenario and our various responses.
ACI's 7th Houston FCPA Boot Camp will provide you with practical strategies and best practices for addressing high risk areas for enforcement across global business operations while taking you deeper into the world of FCPA and anti-corruption compliance.
9 Implementing an Ethics ProgramBloombergGetty Images.docxevonnehoggarth79783
9 Implementing an Ethics Program
Bloomberg/Getty Images
Learning Outcomes
After reading this chapter, you should be able to do the following:
• Explain how an organization can structure and manage an ethics program.
• Develop a code of conduct that articulates standards to company stakeholders.
• Create an ethics training and communications plan.
• Evaluate mechanisms for obtaining advice on ethical issues and reporting ethical misconduct.
• Design an effective monitoring and auditing system.
ped82162_09_c09_255-294.indd 255 4/23/15 8:47 AM
Introduction
Introduction
Ethics Program Pays Off for Morgan Stanley
On April 25, 2012, Garth Peterson, former managing director for Morgan Stanley’s real estate
business in China, pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) and for
conspiring to evade Morgan Stanley’s internal controls for meeting securities laws for invest-
ment advisers (United States Department of Justice, 2012). From 2004 to 2007, Peterson
cultivated a relationship with a Chinese official to obtain business approvals. In 2008, execu-
tives at Morgan Stanley discovered the violations, reported them to the U.S. Securities and
Exchange Commission (SEC), and fired Peterson (Lucchetti & Kendall, 2012). Department of
Justice officials declined to bring any enforcement action against Morgan Stanley because of
its documented ethics and compliance program, stating:
According to court documents, Morgan Stanley maintained a system of internal
controls meant to ensure accountability for its assets and to prevent employ-
ees from offering, promising or paying anything of value to foreign govern-
ment officials. Morgan Stanley’s internal policies, which were updated regu-
larly to reflect regulatory developments and specific risks, prohibited bribery
and addressed corruption risks associated with the giving of gifts, business
entertainment, travel, lodging, meals, charitable contributions and employ-
ment. Morgan Stanley frequently trained its employees on its internal policies,
the FCPA and other anti-corruption laws. Between 2002 and 2008, Morgan
Stanley trained various groups of Asia-based personnel on anti-corruption
policies 54 times. During the same period, Morgan Stanley trained Peterson on
the FCPA seven times and reminded him to comply with the FCPA at least 35
times. Morgan Stanley’s compliance personnel regularly monitored transac-
tions, randomly audited particular employees, transactions and business units,
and tested to identify illicit payments. Moreover, Morgan Stanley conducted
extensive due diligence on all new business partners and imposed stringent
controls on payments made to business partners. (United States Department
of Justice, 2012, para. 6)
The experience of Morgan Stanley shows that companies with excellent ethics and compli-
ance programs may be protected should their employees violate standards. An excellent eth-
ics and compliance program meets five comm.
Enriching Globalization With Low Cost Tech & Social Media: Serving More than ...Michele DeStefano
This presentation explores the types of low cost tech and social media tools that can be used to enrich globalization and legal education in general and the reasons why legal educations should use these tools.
DeStefano, Alternative Litigation Funders and Claim Holders: A Common Intere...Michele DeStefano
To date, there is little agreement on whether communications and work resulting from the relationship between claim funders, commercial claim holders, and their lawyers should be protected by either the attorney-client privilege or work-product doctrine. And there is much debate about whether and how the common interest doctrine might be used to support or deny attorney-client privilege and/or work product doctrine protection in this context. In order to shed light on this debate, this Article reviews and analyzes the case law that exists in the claim funding context and analogizes and compares it to that in other areas such as public relations, patent law, and insurance. Ultimately, it argues that given the reasoning applying exceptions to waiver in other contexts, presumptions that the attorney-client privilege does not apply and that the work product does are misplaced. Claim funders may share a common interest with commercial claim holders and both the attorney-client privilege and work product doctrine should from a normative and theoretical standpoint apply in some (but not all) situations. That said, given the sensitive issues involved with and arguments against claim funding, and the precariousness of both privilege doctrines, it predicts, that, in practice, privilege protection will not be effectuated to the degree with which the doctrine might support. This is because the issues involved with and arguments against claim funding are common ones used by the ABA and other entities as stopgaps to prevent infringement on the sanctity of the lawyer-client relationship, the reputation of the profession, and lawyers’ monopoly of legal and law-related services. As in the other contexts, (like public relations), if courts view claim funding as a threat to the independence of the lawyer or something that degrades the profession or eats away at lawyers’ monopoly, they have the ability (under the doctrine) to deny protection of the communications. Thus, the article concludes with some advice to claimholders, lawyers, and claim funders for how to navigate the current (and future) unpredictable privilege landscape.
DeStefano, claim funders and stone soup hls 11 12-12Michele DeStefano
The broad thesis of this presentation is that an environment that fosters input from nonlawyers is better than a closed one, and that the time has come to rethink the U.S. legal profession's rules and structures that were designed to narrow exposure to, and influence by, nonlawyers. To illustrate this contention, this presentation highlights one recent movement in the globalized legal marketplace that remains stymied in the United States: nonlawyer investment in claims i.e., claim funding. [The current rules and regulations governing nonlawyer investment in claims epitomize the U.S. legal profession's stance on collaboration between law- yers and nonlawyers. Many states completely outlaw claim funding by nonlawyers based on outdated and arguably inaccurate interpretations of the ancient doctrines of maintenance, interfering in a legal proceeding by a third party that is not a party to the suit; champerty, maintenance for a profit; and barratry, inciting litigation. Although some states have abolished these antiquated barriers to claim funding, many states make approval contingent on the third-party funder having absolutely no control, input, or influence over litigation decisions and case management--a rule that, as a practical matter, is unrealistic.
This presentation starts with the premise that law is a business, and thus the legal market cannot be insulated from capital markets. Because what happens in other parts of the world invariably affects what happens in the United States, there will be strong pressure for the United States to allow investment in claims in all fifty states, and to a greater degree than currently allowed. Although the bar may be able to resist buy-in for some unpredict- able but possibly significant period of time, this presentation contends that lawyers and clients will potentially benefit if the U.S. bar embraces claim funding in the commercial context and implements a regulatory system to maximize its advantages and minimize its potential risks. Further, this presentation utilizes the example of claim funding to show that granting nonlawyers more influence could stimulate much needed innovation in the provision and management of legal services, enhance problem solving and efficiency for the benefit of clients and society, and in- crease lawyer's ability to compete in a global marketplace. Instead of equating outside influence by nonlawyers with having “too many cooks in the kitchen,” the U.S. legal profession could take advantage of a regulated level of influence to help create the richest stone soup possible.
Beyond Benchmarking, How Should Law and Corporate Compliance IntersectMichele DeStefano
In this post melt-down climate, the regulatory environment raises questions about the compliance function in large, publicly traded corporations. What is it? What purpose does and should it serve? How is the compliance function different or the same as the legal, ethics, or risk management functions? And who should oversee compliance? Although some exists, more empirical research should be done on what function a compliance department serves, where compliance is currently housed in large, publicly traded corporations and, more importantly, why corporations have located the compliance function within or outside the legal department. Further, no other study to date entails qualitative research with United States’ general counsels, chief compliance officers and other non-lawyer senior management on these issues. The purpose of this project is to explore the following questions: (i) What is compliance? What is the major purpose of a compliance department, what areas does it cover (ii) How is it managed and where is it currently housed in large, publicly traded corporations, and (iii) What are the risks and benefits of having the compliance function separated from the legal department and run by non-lawyers (or non-practicing lawyers) that report to the CEO and/or board of directors? To investigate these questions, I i) talked briefly with forty general counsels of S&P 500 corporations in banking, pharmaceutical, and petroleum industries about compliance within their organization; and ii) conducted thirty in-depth qualitative interviews with general counsels and chief compliance officers of large, publicly traded corporations across a variety of industries.
The research analysis will lead to a series of articles. The first article, Transitioning Corporate Governance to Compliance will take the position that a transition in corporate governance has occurred over the past 20 years. What might have been thought of 20 years ago as the basic corporate governance function is now being ceded to compliance departments in large publicly traded organizations. This article will overview of what role the compliance function at some large, publicly traded corporations serves. Through the voices of the Compliance Study interviewees, it will analyze and present a typology of roles that compliance officers may play and recommend which role is the ideal one.
The second article, The Government’s Unofficial Stance on Compliance Departments: To Comply or Not to Comply? will analyze the question of whether whether compliance should be separated from the legal department. To that end, it will explore the risks and benefits of such a structure and the limitations that exist when the compliance function is led by the general counsel.
DeStefano, Lawyers Influencing Nonlawyers: Too Many Cooks in the Kitchen or S...Michele DeStefano
The U.S. legal profession is in need of innovation and innovation comes from open, collaborative, and diverse environments. Yet, the rules regulating the U.S. legal profession foster a closed environment, one that discourages nonlawyer influence on lawyers and alliances between legal and non-legal professionals. The Model Rules of Professional Conduct, the bar licensing requirements, the application of the work- product doctrine and attorney-client privilege, and even the way law firms structure themselves consistently impede an open multi-disciplinary approach. Instead, they favor a closed environment and/or an exclusive one-on-one relationship between attorneys and their clients. In some way or another, they support the notion that when lawyers work with nonlawyers, there are too many cooks in the kitchen.
In light of our growing understanding of other fields, it may be time to reexamine some of these rules and their underlying assumptions. First, they do not represent the way many U.S. lawyers actually practice. Second, in an economic downturn, where the line between what is business and what is law is anything but clear, such tactics may limit lawyers’ range of business opportunities. Instead of protecting lawyers’ economic futures, it may provide the impetus for nonlawyers, who want a piece of the lawyers’ pie, to innovate. Essentially, an environment that fosters input from nonlawyers is better than a closed one and the legal profession’s continued attachment to rules and structures that compel closed environments and severely restrict the influence of nonlawyers on lawyers (at least in the commercial context) may leave the U.S. legal profession woefully behind other countries, and U.S. lawyers with a smaller piece of the pie.
Virtual Third Places, Making Room in the Law MarketMichele DeStefano
The common conception is that inventions are discovered by a scientist, alone in a lab, coming upon the “a-ha” or “eureka” moment, but that is often not the case. Instead, it is the interactions that scientists have with others that lead to breakthroughs. Exaptation (as opposed to adaptation) occurs when something is borrowed from one field and used to solve a problem in a totally unrelated field. In other words, innovation often comes from “refurbished” parts as opposed to newfangled creation. It is the result of exposure to ideas outside the immediate focus of interest, broad diverse connections and networks. Clearly, the legal marketplace could benefit from innovation and exaptation. The question is, however, given the restrictive regulations and legal structure within the U.S. and the global nature of the legal profession, how can the U.S. legal profession create environments that foster these diverse and eclectic connections that create the accidental combination of ingredients? This presentation attempts to answers this question by borrowing (i.e., exapting) - from other fields. It suggests that the answer is a technological one: the legal marketplace could benefit from developing Virtual Third Places. A “third place,” according to the sociologist and anthropologist Ray Oldenburg, is an environment that enables connections among people from different disciplines, and is set apart from traditional meeting places like the home or office. Utilizing some real world examples, this presentation attempts to demonstrate that the ideal third place for US lawyers and legal educators is a virtual one that promotes creative interaction among people from different disciplines, backgrounds, and political views, with various types and levels of expertise and passions.
Car Accident Injury Do I Have a Case....Knowyourright
Every year, thousands of Minnesotans are injured in car accidents. These injuries can be severe – even life-changing. Under Minnesota law, you can pursue compensation through a personal injury lawsuit.
Military Commissions details LtCol Thomas Jasper as Detailed Defense CounselThomas (Tom) Jasper
Military Commissions Trial Judiciary, Guantanamo Bay, Cuba. Notice of the Chief Defense Counsel's detailing of LtCol Thomas F. Jasper, Jr. USMC, as Detailed Defense Counsel for Abd Al Hadi Al-Iraqi on 6 August 2014 in the case of United States v. Hadi al Iraqi (10026)
A "File Trademark" is a legal term referring to the registration of a unique symbol, logo, or name used to identify and distinguish products or services. This process provides legal protection, granting exclusive rights to the trademark owner, and helps prevent unauthorized use by competitors.
Visit Now: https://www.tumblr.com/trademark-quick/751620857551634432/ensure-legal-protection-file-your-trademark-with?source=share
Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
The Main Procedures for Obtaining Cypriot Citizenship
DeStefano, Compliance, Transparency, Visibility: A U.S. Perspective: Cloudy At Best
1. Compliance, Transparency, & Visibility
A Perspective of the US Market:
Cloudy At Best
Michele DeStefano
Professor of Law, University of Miami
Meeting of LAAW e.V. Munich Germany
October 2014
6. Questions
1. How Did We Get Here?
2. How is Compliance being managed?
3. What purpose does and should a compliance
department serve at a large publicly traded
corporation?
4. Who SHOULD be responsible for compliance
and what role should the Chief Compliance
Officer play?
5. How do ethics and culture fit in?
6. How should outside law firms be involved?
8. The Compliance Study
• Secondary research
• Primary Research:
– Interviewed 70 General Counsels and Chief
Compliance Officers
• @ large publicly traded corporations
• across multiple industries including banking,
petroleum, and pharmaceutical
9. The Compliance Study
Research Methodology
Stage 1 2006-2007
• 36 brief interviews
– General Counsels of S&P 500 corps
– Banking, pharmaceutical, and petroleum
10/9/2014 DeStefano 9
10. Stage 2 2010-2012
• 35 in-depth interviews
– General Counsels
– Chief Compliance Officers
• Large, publicly traded corporations in 9
industries:
– Pharmaceutical, Electric/Energy, Health Care,
Consumer Products, Petroleum, Professional
Services, Financial Services, Government,
Transportation & Logistics
10/9/2014 DeStefano 10
The Compliance Study
Research Methodology
11. Caveats:
1. Sample size is very very low
2. Not a random sample
3. Self-reports by senior executives which
arguably have certain stories to tell
10/9/2014 DeStefano 11
The Compliance Study
Research Methodology
12. Road Map
1) Background
2) Overview
1) The Compliance Function
2) Role & Challenges faced by CCOs
3) Organizational Structure
3) Trends & Recent Developments
– Hypotheses regarding Departmentalization
4) Conclusion
14. Background: 1960s & 1970s
In response,
other companies
beefed up their
compliance programs
Used strength of compliance
Program as defense against
Antitrust penalties
FCPA 1977 incented robust compliance programs
15. Background: 1980s & 1990s
OSGs mitigated corp
criminal penalties if orgs
showed effective
compliance program
Fraud by Defense Contractors
led to DOD reqs: written code,
training, procedures
In re Caremark and the Business Judgment Rule
16. Background: 2000s
Revisions to sentencing
guidelines recommend
ethics & compliance
programs
Sarbanes-Oxley Act change in
focus on individual actors and
corp fines to directing changes
within corporate entity
Deferred Prosecution Agreements require
structural changes to compliance function
17. Background: 2000s
2013 (2010): public federal
database of payments & gifts
made to physicians & teaching
hospitals by medical device and
pharmaceutical companies
Dodd Frank Act
and the
Whistleblower
Program 2010
21. What Is Corporate Compliance?
10/9/2014 DeStefano 21
“Most people can
articulate what a
lawyer or auditor
does for a living, but
the average
employee may have
difficulty defining
‘compliance.’”
Jose A. Tabuena
23. Both Legal and Compliance
rely on
legal expertise and
have a shared goal
to increase compliance
with the law
10/9/2014 DeStefano 23
Compliance Function
vs Legal
25. Compliance Function
• Builds policies and procedures
• Trains and educate employees
• Tests employees on adherence
• Reports misconduct
• Remediates
26. Key Substantive Areas
10/9/2014 DeStefano 26
• Fraud and Corruption
– Gifts, anti-bribery, anticorruption, antifraud, FCPA
compliance, and data protection
• Employment/Labor Law
• Antitrust/Trade Regulation
• Environment/Health and Safety
• Securities Regulation
27. Challenges for the CCO
Compliance personnel are charged with
communicating and providing training on the
legal and ethical regulations to
employees
around
the world.
28. Challenges for the CCO
They are also
charged with
risk assessment
and
understanding
risk tolerances
29. Challenges for the CCO
International training is
important not just to ensure
compliance but “so that we
can explain to the
government,
‘We did all we could: we
went there, we were there in
person, they got online
training, we did risk
assessments. This still
happened, but this is how
we try to show we have an
effective Compliance
Program.’” CCO
30. Challenges for the CCO
Thus, in addition to audit and internal
controls, training, ethics, and HR
communications, compliance professionals
need to understand politics.
Jack of all Trades:
CCO plays many
roles: from confidant,
to cop, to counselor,
to tattletale
33. Compliance was Part of the Legal
Department and Reported to
General Counsel
10/9/2014 DeStefano 33
34. Steady Decline in Reporting to GC
2011
To GC
Other
2012
To GC
Other
2013
To GC
Other
Data from PWC annual surveys of over 800 corporate compliance officers
41. Although the government
(e.g., OIG of the SEC and the DHHS)
does not
*require*
corporations
to have a separate
compliance department, or
a certain set of
ethics and compliance
programs and training
. . .
10/9/2014 DeStefano 41
45. 5 Year Corporate Integrity
Agreement
• Reporting hotline
• Develop employee training
• Revamp written codes of conduct
• Designate a chief compliance officer who
would report directly to the Chairman,
CEO, and President of the company.
– The chief compliance officer “shall not be or
be subordinate to the general counsel or chief
financial officer.”
47. Settlement Agreement
• Develop employee training
• Revamp written codes of conduct
• Designate a chief compliance officer who
would report directly to the Chairman,
CEO, and President of the company.
– The chief compliance officer “shall not be or
be subordinate to the general counsel or chief
financial officer.”
• Corporate Monitor
49. 5 Year Corporate Integrity
Agreement
• Develop employee training
• Revamp written codes of conduct
• Designate a chief compliance officer who
would report directly to the Chairman,
CEO, and President of the company.
– The chief compliance officer “shall not be or
be subordinate to the general counsel or chief
financial officer.”
• Corporate Monitor
51. SEC Saga Continues
• Recommendation – one department with
primary compliance responsibility
– Remained under Office of GC
• But in 2011 . . .
– The SEC GC was named as a defendant in
Madoff bankruptcy suit
– SEC was criticized for organization structure
of compliance
– In response, SEC separates compliance
function to reports to the SEC Chairman
52. The reaction by the DDHS and SEC
DEPARTMENTALIZATION
10/9/2014 DeStefano 52
53. 10/9/2014 DeStefano 53
• Changes in corporate liability rules
• Some of the Federal Sentencing
Guidelines
• Best Practices developed by
governmental entities
• OIG Compliance Program Guidance
• Institute of Internal Audit
• In-House Counsel Conferences
This Reaction is Consistent with Recent
Guidelines and Recommendations
54. Inconsistent with other corporate practices
and mandates that put compliance in the
hands of lawyers . . .
10/9/2014 DeStefano 54
55. Examples
ABA Task Force on
Corporate Responsibility
recommended that
general counsels
oversee compliance
(with direct oversight by
the Board)
And MR 1.6 (may)and
1.13 (must)
10/9/2014 DeStefano 55
Recent Federal Sentencing Guidelines
enable GC to oversee Compliance
SEC §307 of Sarbanes-
Oxley puts the GC in
role of whistle
blower/gatekeeper
2004 Investment
Company Act
'Compliance Rule'
enables GC to oversee
compliance
56. Despite the debate over who should
play gatekeeper, more and more
corporations are departmentalizing
10/9/2014 DeStefano 56
57. Review: Government Mandates
• Corporate Reporting
– Sunshine Act
– Dodd Frank
– Sarbanes Oxley
• Internal Policies and Programs
– Revised Written Codes of Conduct and Enhanced
Training
• Corporate Monitorships
• Departmentalization
– CCO separate from GC
– Direct access to the Board
58. Potential Objectives of Government
Mandates?
• Increase actual compliance with the law (and
prevention of noncompliance)
• Increase transparency externally & internally
– So that company AND government has increased
access to information in order to monitor and
catch noncompliance
• Increase visibility & entrenchment
– To enhance importance of and commitment to
compliance internally
– To demonstrate government has acted
68. May Not Increase Compliance
Watch Dog AND Cost Center
“I think compliance is the
world’s longest four letter word
XXXX
and it initiates a response in
people that is negative.”
- CCO
Interviewee
70. ‘C’ for ‘Chief’ ≠ Unlock the
Door to the “C-Suite”
“[E]ven if the chief compliance officer reports
to the [board] or CEO, they are going to
have the same problem, because chances
are the CEO is going to want to listen to the
general counsel . . . because they are their
trusted legal advisor. Very rarely is the
compliance officer reporting to a CEO,
because that’s what the CEO wants.”
– CCO/Assoc. GC
71. May Not Increase Compliance
No Guarantee
Right Professional with Right Skills
87. 10/9/2014 DeStefano 87
May Not Increase Visibility & Entrenchment
Emphasis ≠ Culture
Easy to Control:
Routine Check
the Box
Harder to Control:
Complex, multifaceted,
About ethics and morals
99. Recommendations
• Look inward at actual decision making
processes of individuals and at the informal
values, culture, and networks
– Conduct a network analysis to determine
communication flow and critical stopgaps
• Liability mitigation to corporations that make
changes based on internal findings on the
networks and ethical culture that exists
beneath the org chart
100. 10/9/2014 DeStefano 100
"Everything's got a moral,
if only you can find it.”
Lewis Caroll,
Alice’s Adventures in Wonderland
and Through the Looking Glass
102. Compliance, Transparency, & Visibility
A Perspective of the US Market:
Cloudy At Best
Michele DeStefano
Professor of Law, University of Miami
Meeting of LAAW e.V. Munich Germany
October 2014
Editor's Notes
Potential objectives of these govt mandates – departentalization specifcially but also sunshine act, whistle blower act etc.
----- Meeting Notes (10/9/14 06:45) -----
use research along with secondary to inform my analysis
Bacgkround US Regulatory History from 1960 to Today;
Overview The compliance function Role of and challenges faced by the CCO Organizational structure
Trends - Government MandatesvFour ExamplesvObjectives
***Tin 1960s governmnet prosecuted a group of heavy electric equipment companies for antitrust violations. GE argued that the strength of its compliance program should be part of its criminal defense – and in response other companies beefed up their compliance programs
And the Foreign Corrupt Practices Act of 1977 incented corps to develop more robust compliance programs
***Whistleblower uncovered fruad by govt defense contractors – lead to DOD issueing reqs
***OSGs Organizational Sentencing Guidelines wereimplemented –
partnered with In re caremark (interpreted by Delaware Stone v Ritter) busin judgment rule protection only appplies to directors who exercise a good faith judgment that the corps info and reporting system is in concept and deisgen adequate to assure the board that appropriate info will come to its attention in a timely manner as a matter of ordinary operations
***change in focus to directing corporate stucture – SOX, sentencing guidelines – include mitigation in sentencing for good programs, and deferred pros and nonprose agreeements (consent decrees) mandating structural changes – which we will delve into a bit more
***Corpor Crimilnial Liability Rules -- designed to incent people to give specific timiely info – if result in successful action over 1million then can get 10-30% monies collected – OWB – within SEC commission There is even a Chief of the Office of the Whistleblower. In 2013 th e office paid whistleblowers over 14 million in contributions to succeess of actions against frauds
In past 15 years in the wake of corporate scandals tha thave spanned industries pharma, insurance, financial services, health care, consumer p;roducts – the compliance funtionc is getting a lot of attention
Huge roup of lawyers and nonlawyers that now consider themsevels a part of this professsion – with professional associatisons and conferences like this one dedicated – and separate compliance departments and chief compliance officers and writtend codes of ethics and programs, and montiory and audit sytems and reporting procedures.
One of the reasons I set out to do these interviews was that compliance seemed to mean different things to different people
What are all these compliacne professionals doing? Not as clear as you may think
Difficult to tell where legal ends and compliance begins
Hard to sleep at night!
One GC of large trucking company said – I know someone is breaking the law someowhere at any moment – the key is what law and have I done everythign I can to help prevent it
Help prevent investigations – and mitigate penalties if noncompliance found
In terms of structure and organization at large publicly traded corporations, historically there has been a trend for compliance directors to report directly to the general counsel—or even to be the general counsel.
PwC’s third annual survey of 800 corporate compliance officers,117 reported that there has been a “steady reduction in formal reporting of compliance into the legal function over the past three years” (from thirty-seven percent of respondents in 2011 to thirty-three percent in 2012 to twenty-eight percent in 2013).118
Separating out the compliance function from the
In the wake of corporate scandals from JP Morgan to Walmart
And in response to all of these new regs and increased penalties Dodd Frank, Sunshine Act etc
Corporations are adopting – as a preemptive move – enhanced compliance programs so that Like GE in the 1960s they can defend that they “tried”
Of course also comes involuntary initiatives adopted bc they are mandates by the government – time and time again
PUT IN YOUR CHOICE
HANDCUFFS here
4 examples of recent misconduct and the govt reactions
In 2004, the Schering-Plough Corporation, one of the largest pharmaceutical manufacturers in the world, agreed to plead guilty to fraud in relation to pricing information it provided (or failed to provide) to Medicaid for its drug Claritin.136 Evidently, believing that Claritin was too expensive, two health maintenance organizations (“HMOs”) threatened to replace Claritin with Allegra on their list of covered drugs.137 To discourage the HMOs from doing so, Schering- Plough allegedly paid the HMOs millions of dollars in discounts via data fees, interest free loans, and rebates.138 Reputedly, Schering
pled guilty to one count of offering and paying a kickback in violation of the Anti-Kickback Statute.140 Further, it paid more than $290 million in settlement141 and assented to a five-year corporate integrity agreement (“CIA”) with the DHHS’s OIG.142 In addition to mandating that the company establish a reporting hotline, develop employee training, and revamp the written codes of conduct,143 the CIA required the company to designate a chief compliance officer who would report directly to the Chairman, CEO, and President of the company. 144
In October 2004, the SEC147 charged Quest Diagnostics with fraudulently projecting over $3.8 billion in revenue earnings in a
illegally promoting several of its drugs, including Bextra, for uses that were not specifically approved by the Federal Drug Administration (“FDA”)
led guilty to a felony criminal violation of the Federal Food, Drug, & Cosmetic Act and signed a five year CIA.15
FBI Investiaged 2 SEC attorneys for insider trading - at the time of the alleged insider trading, the compliance function at the SEC was disjointed and housed in two different departments.164 Disconcertingly, the OIG report concluded that the SEC “lack[ed] any true compliance system to monitor SEC employees’ securities transactions,”165 understand reporting requirements or who was in charge of overseeing ethics and compliance,166 and that there was “lax enforcement of the reporting requirements.”167
The report recommended that the SEC ensure that one department be vested with primary responsibility over compliance. And in response, the SEC consolidated the compliance department under the Office of Ethics Counsel and hired its first ever, chief compliance officer.168 This department, however, remained a part of the Office of General Counsel until late 2011.169 After the SEC’s general counsel was named as one of the defendants in a Madoff bankruptcy suit, the OIG criticized the SEC for having the ethics counsel report to the general counsel.170 In response, the SEC “formally proclaimed thndependence of its Office of Ethics Counsel as a stand-alone unit within the agency.”171 Resultantly, the head of this office no longer reports to the General Counsel but instead to the SEC Chairman.
Increase training policies – CCO does not report to the GC
Like the ABA Task force on Corp Resp that recommends that GC oversee compliance (with direct oversight by board)
MR 1.6 (may and 1.13 must
SEC Section 307 of Sarbanes Oxly puts GC in role of whistle blower/gatekeeper
2004 investment Company Act Compliane Rule enables GC to oversee compliance & Recent Fed Setencing guidelines
Departmentalizing and creating similar programs and policies
Potential objectives of these govt mandates – corporate monitorships, new laws, etc, departentalization specifcially but also sunshine act, whistle blower act etc.
**These last group differ slightly –
** For example, Some commentators claim that the government’s focus on ethics and on other aspects of compliance like corporate monitorships “demonstrate a broader regulatory trend that recognizes the limits of regulating corporations through external prescriptions and inspections, and therefore directs its energies towards encouraging corporations to engage in meaningful self-regulation through the adoption of effective internal compliance programs.” Ford & Hess, supra note 25, at 2; see supra note 5
Potential objectives of these govt mandates – corporate monitorships, new laws, etc, departentalization specifcially but also sunshine act, whistle blower act etc.
*Specifci to Departmentalization
By separating the two departments, a chief compliance officer will have the autonomy she needs to uncover and report misconduct thereby increasing the level of transparency into corporate conduct (by the board of directors and, in the case of investigations, also by the government).31
Potential objectives of these govt mandates – departentalization specifcially but also sunshine act, whistle blower act etc.
Potential objectives of these govt mandates – departentalization specifcially but also sunshine act, whistle blower act etc.
Well vven if its not wrong –it doesn’t appear to be right
Potential objectives of these govt mandates – corporate monitorships, new laws, etc, departentalization specifcially but also sunshine act, whistle blower act etc.
Departmentalization is purposeful – to sep compliance so that this professional has autonomy and independence to act – but result is that they are Seen as separate – legal and compliance
Create tension – refuse to collaborate – which goes against problem solving literature – entrenches competition and impedes open communication
And creates turf wars – which do not lend themselves to collaboration – which is key to problem solving
Further separation risks viewing compliance as an outsider -- How can you uncover anything if you aren’t invited to the table?
----- Meeting Notes (10/9/14 06:45) -----
true of GCs years ago - but now have a seat at C-suite
Worse separation exacerbates the idea that complinace is seen as a watch dog – purposefully kept out – not just outsider
----- Meeting Notes (10/9/14 06:45) -----
seen as "NO" people
Even if that isn’t the case, separation by itself – although it may signal that the corp is commiteed to compliance - doesn’t provide the CCO with the power influence and support they need to be able to do their job
Jack of all trades – master to NONE
There is no reason to believe that an independent chief compliance officer will have a better set of compliance skills or expertise than a chief compliance officer who reports to the general counsel.
Thus, it is not clear that the unofficial governmental mandate will change the current status quo.
Indeed its often Assoc GC that takes the job
Enhancing compliance – by departmentazlizing may not increase compliance bc people will view it as “taken care of”
Lack of responsibility
Lawyers not watching – not playing gatekeeping role
eparating the compliance and legal functions could entrench the fallacy that the general counsel’s role is to define what the corporation “can” do from a technically legal point of view versus what it “should do” based on the spirit of the law and other considerations
It exacerbates what Rosen calls this the Lawyer Cast of Mind – lawyers may be followers – and “may even aid their clients to resist and subvert regulation.”282 Thus, they find that lawyers can behave as “gamesters” treating the law as “a game of loopholes” and litigation as unavoidable.283 Similarly, others contend that lawyers take an “excessively legalistic approach” to compliance that obscures the “cultural influences that impact employee behaviors or nuances.”284
We have double trouble with separation - . It could lead to expectations that the legal team is a group of super talented, super educated set of strategic individuals—completely off the hook for compliance, ethics, reputation, and business risk counseling—and completely on the hook for helping the corporation find loopholes in the law—and there to serve the client above all else
Counterintuitive –one of the reasons for sep is to prevent the a/c priv from applying. However departmentalization may strengthen the argument that the attorney-client privilege should apply to communications with lawyers around compliance issues and, therefore, lead to less transparency into corporate behavior and
In the states the a/c priv only applies between lawyers and clients when primary purpose of the communication is legal advice. If the compliance function is sep – it makes clear that compl is not LEGAL and not considered part of legal then no ac priv right? Wrong
. Actually, this may increase application. Bc every time there is a lawyer in the room with compliance – arg can be made they were there for the primary purpose of legal advice – NOT true if the lawyer is also the CCO – thsu more information might actually be protectable – or better args for it
Thus, the way that employees interact and the groups they interact with do not match static organization or traditional communication flow diagrams.381 Instead, “social networks” (defined by Rob Cross and Andrew Parker are the more relevant indicator of organization and communication flow within institutions.382 And they have a dynamic influence on an organizations’ performance and its ability to execute strategy, react to issues, and to change.383 The internal dynamics of a corporation can create stopgaps and “moral mazes.”384 SO much depends on this inner web and communication among the teams . . .
Thus, the way that employees interact and the groups they interact with do not match static organization or traditional communication flow diagrams.381 Instead, “social networks” (defined by Rob Cross and Andrew Parker are the more relevant indicator of organization and communication flow within institutions.382 And they have a dynamic influence on an organizations’ performance and its ability to execute strategy, react to issues, and to change.383 The internal dynamics of a corporation can create stopgaps and “moral mazes.”384 SO much depends on this inner web and communication among the teams . . .
**Researchers have shown that First, having compliance report to legal may increase the corporation’s attention on risks, and, therefore, compliance. Bc Lawyers, they claim, are like Herman Melville’s “lightning-rod salesmen putting fear into people’s heads about the risks that “lightning” will strike.
** When a lawyer (as opposed to another type of professional) is in charge of compliance “the company is more frightened of conflict with regulators and third parties.”
While it is true that govt has said that it wants to insitll culture of compliance its not clear that xy do so. Some commentators claim that the government’s focus on ethics and on other aspects of compliance like corporate monitorships “demonstrate a broader regulatory trend towards encouraging corporations to engage in meaningful self-regulation - AND CULTURE ,BUT govt reg they place value on structural manifestations of compliance like adoption of codes of conduct, revisions to mission statements, and enactment of training programs.371
Second, However, there is little empirical evidence that these trappings are effective at deterring prohibited conduct without more372 and experts claim they may actually be the “weakest link in an org ethical structure
formal controls are completely unconnected to the way employees interact376 and are decoupled from norms and ethics.37
When dealing with routine check-the-box processes, noncompliance with these requirements is easy to uncover, and compliance is easy to motivate. However, when the choice involves, nonroutine, complex, multifaceted choices about ethics, morals, or personal preferences, malfeasance is much harder to control.
Combination of extrinsic and intrinsic
Can motivate simple jobs and complinance steps with carrots and sticks but not necesssarily true for the more complicated -
Money can motivate for routine tasks - explaining research study where offering money to people to give blood decreased by half the number of people willing to give blood). Also study with monkeys and puzzles
Ultimately, the analysis indicates that departmentalization is the wrong answer because the right question is not about independence but instead about connectivity, informal norms, ethics, and motivation.54
Speeding limits – there is a fine – you choose whether to break the law – like the day care situation