Reconceptualising Corporate Compliance: Responsibility, Freedom and the Law (Contemporary Studies in Corporate Law)

This book offers a comprehensive examination of the issues surrounding corporate compliance. Should corporations comply with the spirit or the letter of the law? What role does compliance play in a capitalist market economy? Why is it that otherwise law-abiding citizens are willing to implement corporate compliance strategies that are seemingly at odds with their personal values? Dr Donovan responds to these questions and more, providing a persuasive argument for the legitimate role of spirited compliance within a market economy. In doing so, she employs the lens of classical liberal ideology, challenging the widespread view that technical compliance is simply 'capitalism.' In an examination that has relevance beyond the compliance arena, the author also explores how the architecture of the firm facilitates the often atypical compliance decisions that individuals make when acting within a corporate setting. The book draws on social psychology to offer important insights into how the often-elusive goal of corporate behavioural change can be achieved, for the benefit of both the market and society as a whole. Joint runner-up of the 2021 SLS Peter Birks Prize for Outstanding Legal Scholarship. "This book offers a comprehensive examination of the issues surrounding corporate compliance. Corporate compliance standards are often the subject of significant public debate. Recent media scrutiny of the tax strategies of complex multinationals revealed that, notwithstanding prior scandals such as Enron, Worldcom and Parmalat, corporations continue to adopt compliance practices that, whilst technically legal, fundamentally undermine the intention (or spirit) of the law. However, the question of corporate compliance is not simply a matter of fiscal policy but goes to the core of our understanding of corporate responsibility within society. As we enter the fourth industrial revolution, and as we continue to bear witness, these matters remain of fundamental and pressing importance. Yet why is it that technical compliance is so widely rejected by society yet so widely adopted and defended by corporate actors? Why is it that regulatory responses to each corporate scandal seem unable to prevent future transgressions? Why is it that otherwise law-abiding citizens act contrary to their personal values when making compliance decisions within a corporation? In this book, Dr Donovan responds to these questions by providing a persuasive argument for the legitimate role of spirited compliance within a market economy. In doing so, she employs the lens of classical liberal ideology, challenging the widespread view that technical compliance is simply 'capitalism.' However, finding a normative foundation for spirited compliance only addresses one part of the problem. In an examination that has relevance beyond the compliance arena, the author also explores why and how corporate architecture contributes to the often atypical decisions that individuals make when acting within a corporate environment. The book draws upon behavioural psychology to answer this question and offers insights into how the often-elusive goal of corporate behavioural change can be achieved"-- Provided by publisher Acknowledgements Table of Contents Table of Cases PART I: CONTEXT 1. Capitalism’s Compliance Crisis I. Why Narrative Matters II. The Consequences Of Creativity: What Harm Is It Really? III. Recontextualising Compliance: From Subject to System IV. Scope Of The Book V. Structure Of The Book VI. Conclusion 2. Creative Compliance in Practice I. The Rise And Rise Of Creative Compliance II. Loopholes In The Law: A Focus On Tax Avoidance III. The (Current) Limitations Of Legislation IV. Conclusion 3. Constructing Compliance: Freedom to Choose? I. The Social Construction Of (Creative) Compliance II. The Meaning And Influence Of Norms III. The Homogeneity Of Corporate Norms IV. The Function Of Norms: Free To Choose? V. Conclusion 4. Motivating Compliance: Freedom to Act? I. Deterrence-Based Compliance: Motivating 'Amoral Calculators' II. Legitimacy-Based Compliance III. Legitimising Creative Compliance: Dissonance Reduction and Over-Rationalisation IV. The Compliance Degeneration Cycle V. Conclusion PART II: THE CASE FOR REFORM 5. Compliance, Predictability and the Market Order I. (Mis)Conceptions of the 'Liberty Tradition' II. Defining (and Constraining) Freedom Within the Classical Tradition III. In Defence of the Market Order IV. Complex Systems and Spontaneous Order V. Conclusion 6. The (Ostensible) Equality Paradox: Privilege and Obligation I. Defining 'Equality' Before the Law II. Constraining 'Lawful' Conduct III. Inequality and Legal Privilege IV. Conclusion PART III: BARRIERS TO REFORM 7. A Person without Personality: The Fiduciary Ladder of Corporate ‘Personhood’ I. Separate Personality, Limited Liability and the Reification of The Corporation II. Redefining the Beneficiary: From 'Company' to 'Market' III. The Corporate Fiduciary Ladder IV. Contrasting Other Actors V. Conclusion PART IV: REFORM 8. It is Called Capitalism: Towards a New Market Integrity I. Responsibility, Freedom and the Law II. Radical Integrity III. Conclusion Bibliography Index This book offers a comprehensive examination of the issues surrounding corporate compliance. Why is it that technical compliance is so widely rejected by society yet so widely adopted and defended by corporate actors? Why is it that otherwise law-abiding citizens act contrary to their personal values when making compliance decisions within a corporation? In this book, Dr Donovan answers these questions and provides a persuasive argument for the legitimate role of spirited compliance within a market economy. In doing so, she employs the lens of classical liberal ideology, challenging the widespread view that technical compliance is simply ‘capitalism’. In an examination that has relevance beyond the compliance arena, the author also explores why and how corporate architecture contributes to the often atypical decisions that individuals make when acting within a corporate environment. The book draws upon behavioural psychology and offers insights into how the often-elusive goal of corporate behavioural change can be achieved.