NCJ Number
84457
Journal
Michigan Law Review Volume: 80 Issue: 7 Dated: (June 1982) Pages: 1466-1507
Date Published
1982
Length
42 pages
Annotation
The concept of enforced self-regulation to control corporate crime is outlined, and the advantages and disadvantages of such a model are considered.
Abstract
Under enforced self-regulation, each company would write its own rules for corporate behavior, and once these rules had been ratified by the government, a violation of them would be an offense. The company would be required to establish an internal compliance group to monitor observance of the rules and recommend disciplinary action against violators. If management fails to rectify violations or to act on recommendations for disciplinary action, the director of compliance would be statutorily required to report this to the relevant agency. The regulatory agency would determine that the company rules satisfied all the guidelines set by government policy to ensure that the compliance group is independent within the corporate bureaucracy, to audit the performance of the compliance group, to conduct occasional spot inspections of operating units as an independent check on the compliance unit, and to launch prosecutions, particularly against companies that subverted their compliance group. One of enforced self-regulation's virtues is greater simplicity than direct governmental regulation. Whether the strengths of enforced self-regulation outweigh its weaknesses depends on the area of regulation being considered. The challenge is to find an optimal mix of self-regulation and governmental regulation. A discussion of the corporate case law approach is appended, and 110 footnotes are listed. (Author summary modified)