Table of Contents

Explaining Compliance

Explaining Compliance

Business Responses to Regulation

Edited by Christine Parker and Vibeke Lehmann Nielsen

Explaining Compliance consists of sixteen specially commissioned chapters by the world’s leading empirical researchers, examining whether and how businesses comply with regulation that is designed to affect positive behaviour changes.

Chapter 8: Internal Corporate Compliance Management Systems: Structure, Culture and Agency

Christine Parker and Sharon Gilad

Subjects: law - academic, corporate law and governance, regulation and governance


Christine Parker and Sharon Gilad* INTRODUCTION Since the 1970s a number of influential regulatory scholars have suggested that it ought to be possible to empirically identify internal management structures, decision making processes, employee training and other practices that can effectively prevent misconduct in corporations (e.g. Braithwaite, 1984: 248–262; Stone, 1975: 119–121). Moreover, it has been suggested that it should be possible to design government or voluntary regulatory programs that would force or encourage corporations to self-regulate by putting in place these corporate compliance management systems. Parker (2002: 245–291; 2007) has labeled this type of regulation ‘meta-regulation’ because it attempts to regulate self-regulation. It is also known as ‘enforced self regulation’ (Ayres and Braithwaite, 1992), ‘management-based regulation’ (Coglianese and Lazer, 2003; Coglianese and Nash, 2006; May, 2007), ‘systems-based regulation’ (Kagan and Scholz, 1984; Gunningham and Johnstone, 1999), ‘principles-based regulation’ (Black, 2008; Ford, 2008) or, more broadly, ‘process regulation’ (Gunningham, 2007). Gilad (2010) suggests that the term ‘process-oriented regulation’ best denotes this family of similar, albeit not identical, regulatory institutions that mandate and monitor firms’ self-evaluation, design and management of their operations, governance and controls. Stone (1975: 120–1) was among the first to suggest the importance of meta-regulation to require corporate compliance systems: .  .  . to steer corporations we cannot continue to rely as heavily as we do on threats posed to the organization as a whole, allowing the corporation to adjust to the law’s threats as ‘it’ sees fit, according to ‘its’ calculus of profits and losses. . . what we...

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