Corporate Compliance on a Global Scale: Legitimacy and Effectiveness

Preface
Acknowledgments
Contents
Contributors
About the Editors
Part I: Notion and Evolution of Corporate Compliance
Compliance in Historical Context
1 Modern Compliance
2 From Judging to Administration
3 The Compliance Response
4 Outstanding Issues and Best Practices
5 Conclusion
References
What We Talk About When We Talk About Compliance
1 A Starting Definition of Compliance with Two Warnings
2 The Link Between Risk and Compliance
3 A Taxonomy of Compliance
4 Compliance as a Specific Issue for Large and Complex Corporations
5 The Key Role of Directors
6 The Incentives for Directors
7 Some Concluding Remarks
References
The Imperfect Science: Structural Limits of Corporate Compliance and Co-regulation
1 Compliance Failures: Bolt from the Blue or Predictable Surprise?
2 Corporate Compliance as an Intricate Rulemaking Process: The Tricky Path to Effectiveness
2.1 Compliance Programs as Imperfect Tools
2.2 The “Inefficiency” of the Perfect Corporate Compliance
3 The Ineffectiveness of Compliance in Preventing Crimes by Decisive Actors
4 The Inability to Prevent Crime in Small- or Medium-Sized Companies
5 Conclusion
References
Part II: The Global Dimension of Corporate Compliance
The “Dilemma” of Criminal Compliance for Multinational Enterprises in a Fragmented Legal World
1 Corporate Criminal Liability and Compliance for MNEs: Preliminary Remarks on the Lack of Supranational Enforcement
2 The Increasing Role for Compliance in Assessing Corporate Liability and the Emerging “Dilemma” Concerning MNEs
3 The Fragmentation of Criminal Compliance for MNEs: The Risk of Undercompliance and Overcompliance
4 Home Country and Host Country Standards for Criminal Compliance
5 Third-Country Standards for Criminal Compliance and the Extensive Reach of Jurisdiction
6 Private and Public International Standards for Criminal Compliance
7 Concluding Remarks
References
The Cross-Border Provision of Investment Services: Identifying the Evolving Regulatory Risks and the Strategies for Compliance
1 Introduction
2 The Regulatory Framework for the Cross-Border Provision of Investment Services
2.1 The Three Main Paradigms of Cross-Border Conduct Regulation in Securities and Derivatives Markets
2.2 The National Treatment Approach
2.3 Recognition
2.4 Passporting
2.5 Implications of Different Cross-Border Regulatory Models for Global Banks
3 The Role of the Compliance Function in the Management of Cross-Border Regulatory Risks
3.1 A Brief Overview of the Structure of the Internal Control System for Financial Institutions: The Three Lines of Defence
3.2 The Role of Compliance Within the Three Lines of Defence Model
3.3 The Need for Compliance Programmes and Compliance for the Management of Cross-Border Compliance Risks
3.4 The Role of Compliance, as a Second Line of Defence Function, with Respect to Cross-Border Compliance Risks
4 The Role of Other Functions, in Particular Legal and Internal Audit, and Their Interaction with the Compliance Function
5 Conclusions
References
Receiving “Corporate Compliance” in Latin America
1 Introduction
2 Main Features of Corporate Liability and Compliance in Latin America
2.1 A Revolutionary Shift
2.2 Initial Debates Around Legal Transplants and Local Appropriation
3 Business and Legal Debates Set Out by the New Paradigm
3.1 Business Incentives to Invest in Compliance: The Brazilian Experience
3.2 Outside Brazil: Preparing for the New Scenario
Public Procurement
Facilitation Payments and Commercial Extortion
Political Contributions
Gifts, Hospitalities, and Travel Expenses
3.3 Legal Challenges Within Internal Investigations
Data Privacy
Interviews and Their Subsequent Use as Evidence in Criminal Courts
Legal Privilege
3.4 Corporate Whistleblowing and Competing Plea Bargain Institutions
3.5 B2B Compliance and the Effects of Transnational Private Regulation
Financing
Audit Firms
Mergers and Acquisitions
4 Testing the Paradigm Through High-Level Corruption Cases
5 Conclusion
References
Reports
Case Law
Interviews
Part III: Stakeholders and Corporate Compliance
Stakeholders’ Interests and Compliance
1 From Shareholder Primacy to Stakeholder’s Value: CSR, ESG, Sustainability, and Benefit Corporations
2 Compliance with CSR, ESG, and Sustainability: Respect for the Law—The Case of the Protection of Human Rights
3 CSR, ESG, and Sustainability: Non-financial Reporting, Stakeholders’ Interests, and Compliance—The European Experience: Directive 2014/95/EU
4 The US Experience Compared to the EU: Non-financial Information and Risk Management
5 ESG Investors, ESG Shared Value, Larry Fink’s Rule, and Skepticism
6 Compliance and Liability: If and How? Open Standards and the Role of Standards
7 Conclusion
References
Compliance and Victimization in Health, Safety, and Environment Management Systems
1 Corporate Violence and the Different Contexts of Victimization
2 Motivations for Adopting a Health, Safety, and Environment Management System
2.1 The Incentives and Disincentives Arising from the Legal Framework
2.2 Benefits and Limitations of Voluntary Adoption
3 HSE Management Systems and the Prevention of Victimization
3.1 The References and Aims of HSE Management Systems
3.2 Understanding the Needs and Expectations of Interested Parties
3.3 Managing the Risks: Communication and Participation of Workers and Interested Parties
References
The Direct and Indirect Effects of Corporate Compliance
1 A Brief Introduction
2 The Direct Benefits
3 The Indirect Benefits
4 The Costs
5 Some Concluding Evidence in the Coronavirus Era
References
Part IV: Behavioral and Digital Compliance
Global Behavioral Compliance
1 Introduction
2 Predictive Compliance
3 Behavioral Compliance: Lessons, Strategies, and Tactics
3.1 Teaching and Preaching
3.2 Surveillance
3.3 Reaction, Remediation, and Adjustment
3.4 Compliance Metrics: The Road to RegTech
4 Trust and Moral Agency: The Dilemmas of Behavioral Compliance
5 Behavioral Compliance in Global Perspective
6 Conclusion: The Partial Embrace of Behavioral Compliance
References
Cognitive Dynamics of Compliance and Models of Self-regulation: In Search of Effectiveness in Strategies of Crime Prevention
1 Dilemmas of Compliance
2 Compliance Through Deference
3 The Two Normative Levels of Corporate Compliance
4 Different Models of Self-regulation
4.1 The Crisis of Command-and-Control and the Increasing Relevance of Indirect Regulation
4.2 Voluntary Self-regulation: The Role of Ethics Codes
4.3 Enforced Self-regulation as a Cooperative Strategy
4.4 The Differentiated and Integrated Approach of Responsive Regulation
5 Internal Regulation
5.1 Legitimacy and Adherence to Values According to Procedural Justice
5.2 Legitimate Decision-Making
5.3 Legitimacy in Action and Moral Proximity Among Actors
5.4 Procedural Justice and Restorative Justice in Dealing with Rule-Breakers
6 Conclusion
References
Digital Compliance: The Case for Algorithmic Transparency
1 Digital Innovation and Compliance
1.1 Compliance and Digital Innovation in the Financial Sector
1.2 The Digitalization of Everything and the Risk-Based Approach
1.3 The Rise of Fintech
2 Digital Innovation and Emerging Risks: AI and “Black Box” Algorithms
2.1 Old Risks in New Forms
2.2 New Risks: The Case for Algorithm Opacity
2.3 Machine Learning
2.4 Opacity of AI-Powered Algorithms
2.5 Open the Black Box?
3 Explaining the Algorithm: Actual Trendlines
3.1 The Algorithm and the Rights of Third Parties
3.2 The Early Solution: The Loomis Case
3.3 Teachers and the Algorithm: A Sustainability Issue
3.4 The GDPR and Decisions Based on Automated Processing
3.5 The “Right to Explanation”
3.6 One Explanation Does Not Fit All Cases
4 The New Challenges for the Compliance Function
4.1 The Duty to Explain
4.2 Forward Compliance
5 Conclusions
References
Part V: Corporate Compliance and Law Enforcement
Stakeholders’ Compliance Programs: From Management of Legality to Legitimacy
1 Legitimacy and Criminal Liability of Legal Persons
2 Punishment as Delegitimization
3 The Management of Legitimacy as an Objective of Corporate Social Responsibility
4 The Institutionalization of Stakeholder Interests and the Meaning of Compliance Programs
4.1 Regulation Theory and Legitimacy
4.2 Stakeholders’ Compliance Programs
Institutional Reform of Compliance Programs
New Procedures
The Development of Transparency
5 Sanctions Systems and Legitimacy
6 Conclusions
References
Exploring Voluntary and Mandatory Compliance Programmes in the Field of Anti-Corruption
1 Voluntary and Mandatory Anti-Corruption Compliance Programmes
2 How Anti-Corruption Laws Influence the Adoption and Implementation of Compliance Programmes: Incentives or Obligations?
3 Mandatory, Quasi-Voluntary, and Voluntary Anti-Corruption Compliance Programmes
4 Incentivised Voluntary-Based Models Vs Mandatory-Based Models
4.1 Anti-Corruption Compliance Programmes from an ex Ante Perspective
4.2 Anti-Corruption Compliance Programmes from an ex Post Perspective
4.3 Comparing Models
5 Can Mandatory Compliance Better Prevent Corruption?
5.1 Mandatory Compliance and ex Ante Anti-Corruption Audit
5.2 Mandatory Reform of Compliance in Settlements and ex Post Monitorship
6 Conclusions
References
From a Voluntary to a “Coerced” Dimension: The Remedial Function of Compliance from a Criminal Law Perspective
1 Enhancing the Role of Remedial Activity in the Making of a “Personal” Corporate Criminal Liability
2 The Evolution of Corporate Compliance: From a Voluntary to a “Coerced” Dimension
3 Recent Trends in the Spreading of Settlements as a Form of Resolution of Corporate Crime Cases
4 The Role of Monitors in Controlling Corporate Remediation
5 Remedial Compliance and Corporate Rehabilitation: Some Concluding Considerations from a Criminal Law Perspective
References
Index