Book contents
- The Cambridge Handbook of Compliance
- The Cambridge Handbook of Compliance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- 1 Introduction: Compliance as the Interaction between Rules and Behavior
- Part I Compliance Concepts and Approaches
- Part II Deterrence and Incapacitation
- Part III Incentives
- 22 Does Tort Deter? Inconclusive Empirical Evidence about the Effect of Liability in Preventing Harmful Behaviour
- 23 Crowding-Out Effects of Laws, Policies and Incentives on Compliant Behaviour
- 24 Financial Incentives for Whistleblowers: A Short Survey
- 25 Designing Corporate Leniency Programs
- 26 Incentive Contracts
- Part IV Legitimacy and Social Norms
- Part V Capacity and Opportunity
- Part VI Compliance and Cognition
- Part VII Management and Organizational Processes
- Part VIII Measuring and Evaluating Compliance
- Part IX Analysis of Particular Fields
- References
25 - Designing Corporate Leniency Programs
from Part III - Incentives
Published online by Cambridge University Press: 07 May 2021
- The Cambridge Handbook of Compliance
- The Cambridge Handbook of Compliance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- 1 Introduction: Compliance as the Interaction between Rules and Behavior
- Part I Compliance Concepts and Approaches
- Part II Deterrence and Incapacitation
- Part III Incentives
- 22 Does Tort Deter? Inconclusive Empirical Evidence about the Effect of Liability in Preventing Harmful Behaviour
- 23 Crowding-Out Effects of Laws, Policies and Incentives on Compliant Behaviour
- 24 Financial Incentives for Whistleblowers: A Short Survey
- 25 Designing Corporate Leniency Programs
- 26 Incentive Contracts
- Part IV Legitimacy and Social Norms
- Part V Capacity and Opportunity
- Part VI Compliance and Cognition
- Part VII Management and Organizational Processes
- Part VIII Measuring and Evaluating Compliance
- Part IX Analysis of Particular Fields
- References
Summary
Abstract: Corporate leniency programs promise putative offenders reduced punishment and fewer regulatory interventions in exchange for the corporation’s credible and authentic commitment to remedy wrongdoing and promptly report future violations of law to the requisite authorities. Because these programs have been devised with multiple goals in mind – that is, deterring wrongdoing and punishing corporate executives, improving corporate cultural norms and extending the government’s regulatory reach – it is all but impossible to gauge their success objectively. We know that corporations invest significant resources in compliance-related activity and that they do so in order to take advantage of the various benefits promised by leniency regimes. We cannot definitively say, however, how valuable this activity has been in reducing either the incidence or the severity of harms associated with corporate misconduct.
Notwithstanding these blind spots, recent developments in the US Department of Justice’s stance toward corporate offenders provide valuable insight into the structural design of a leniency program. Message framing, precision of benefit, and the scope and centralization of the entity that administers a leniency program play important roles in how well the program is received by its intended targets and how long it survives. If the program’s popularity and longevity say something about its success, then these design factors merit closer attention.
Using the Department of Justice’s Yates Memo and FCPA Pilot Program as demonstrative examples, this chapter excavates the framing and design factors that influence a leniency program’s performance. Carrots seemingly work better than sticks; and centralization of authority appears to better facilitate relationships between government enforcers and corporate representatives.
But that is not the end of the story. To the outside world, flexible leniency programs can appear clubby, weak and under-effective. The very design elements that generate trust between corporate targets and government enforcers may simultaneously sow credibility problems with the greater public. This conundrum will remain a core issue for policymakers as they continue to implement, shape and tinker with corporate leniency programs.
- Type
- Chapter
- Information
- The Cambridge Handbook of Compliance , pp. 351 - 372Publisher: Cambridge University PressPrint publication year: 2021