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4 - Understanding the Role of Power Distributions in Compliance

from Part 1 - The Compliance Industry, the State, and Measurement Needs

Published online by Cambridge University Press:  17 February 2022

By
Todd Haugh
Edited by
Melissa Rorie  and
Benjamin van Rooij
Melissa Rorie
Affiliation:
University of Nevada, Las Vegas
Benjamin van Rooij
Affiliation:
University of Amsterdam, School of Law
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Summary

Abstract: Companies and the regulators that oversee them assume compliance violations follow a normal distribution based on individual wrongdoing. This assumption causes the focus of compliance programs to be breadth and consistent application of compliance tools. The most significant compliance risks, however, do not conform to this assumption; they are a function of network-driven power law distributions consistent with other aspects of criminal behavior. To more completely understand and measure compliance lapses, and therefore prevent them, companies should focus on ethical influencers within their organizations who create outsized, interconnected risk.

Type
Chapter
Information
Measuring Compliance
Assessing Corporate Crime and Misconduct Prevention
 , pp. 71 - 90
Publisher: Cambridge University Press
Print publication year: 2022

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