The Compliance Process

Even as regulators and prosecutors proclaim the importance of effective compliance programs, failures persist. Organizations fail to ensure that they and their agents comply with legal and regulatory requirements, industry practices, and their own internal policies and norms. From the companies that provide our news, to the financial institutions that serve as our bankers, to the corporations that make our cars, compliance programs fail to prevent misconduct each and every day. The causes of these compliance failures are multifaceted and include general enforcement deficiencies, difficulties associated with overseeing compliance programs within complex organizations, and failures to establish a culture of compliance throughout the organizational structure. In short, creating an effective compliance program is an inherently difficult task.And yet, it may be that organizations can improve compliance within their organizations by rethinking the way they approach the compliance challenge. This Article — drawing on insights from cognitive psychology, behavioral economics, and behavioral ethics — sets forth a new method of evaluating compliance failures that focuses on the compliance process, which has the distinct, albeit interrelated, stages of prevention, detection, investigation, and remediation. The Article argues that utilizing a process frame will assist industry leaders, regulators, and policymakers in conducting more effective root-cause analyses of compliance failures, which will lead to the creation, implementation, and better evaluation of compliance programs. Delineating clear boundaries for the stages within the compliance process is difficult, but getting these distinctions right is essential when confronted with significant or complex compliance failures, particularly when an organization lacks a robust commitment to compliance. Additionally, the process frame can be utilized across regulatory areas and corporate forms, which serves to cement compliance as its own proper field worthy of further inquiry and study. By focusing on “The Compliance Process,” organizations, policymakers, and scholars will improve the tools available for them to assist in the creation and implementation of effective compliance programs

Reframing the DEI Case

Corporate firms have long expressed their support for the idea that their organizations should become more demographically diverse while creating a culture that is inclusive of all members of the firm. These firms have traditionally, however, not been successful at improving demographic diversity and true inclusion within the upper echelons of their organizations. The status quo seemed unlikely to move, but expectations for corporate firms were upended after the #MeToo Movement of 2017 and 2018, which was followed by corporate support of the #BlackLivesMatter Movement in 2020. These two social movements, while distinct in many ways, forced firms to rethink how to approach the status of women and people of color within their organizations. It forced them to ask, yet again, but with renewed energy: “What is the best way to improve diversity and inclusion within firms?” This Article seeks to contribute to scholarly conversations aimed at addressing that, admittedly elusive, question head-on. It argues that in addition to pursuing the business and legal cases for diversity when crafting diversity, equity, and inclusion (“DEI”) programs, firms should also employ insights from behavioral ethics literature. By utilizing insights from behavioral ethics literature, firms can better prompt decisionmakers to recognize that DEI questions—whether under the business or legal case for diversity—are questions that should be evaluated from an ethical perspective. Scholars and firm leaders have long debated the accuracy of the business case rationale in support of DEI efforts. More recent scholarship has focused on the legal case in support of DEI efforts. This Article recognizes that firms committed to crafting meaningful DEI reforms must focus on both the business and legal cases, but they must reinforce the ethical ramifications of DEI concerns under both frameworks. In short, firms committed to creating a successful DEI program must find ways to evoke ethical framing when engaged in the creation of diverse, equitable, and inclusive organizational cultures

Avoiding Judicial Discipline

Over the past several years, several high-profile complaints have been levied against Article III judges alleging improper conduct. Many of these complaints, however, were dismissed without investigation after the judge in question removed themselves from the jurisdiction of the circuit’s judicial council—oftentimes through retirement and once through elevation to the Supreme Court. When judges—the literal arbiters of justice within American society—are able to elude oversight of their own potential misconduct, it puts the legitimacy of the judiciary and rule of law in jeopardy.This Essay argues that it is imperative that mechanisms are adopted that will ensure investigations into judicial misconduct are completed, even in the event that the individual is no longer serving as a judge in the circuit where the complaint has been filed. This Essay suggests two reforms. First, the adoption of customs that will refer any short-circuited investigation to the state bar and to Congress for additional inquiry. Second, the expansion of the judicial councils’ authority to investigate complaints so as to address the jurisdictional limitations that currently allow judges to circumvent attempts at judicial oversight over allegations of misconduct. The status quo that incentivizes avoiding judicial discipline must be reformed into one that allows for thorough and fair investigation of these important matters of public concern

Reframing the DEI Case

Corporate firms have long expressed their support for the idea that their organizations should become more demographically diverse while creating a culture that is inclusive of all members of the firm. These firms have traditionally, however, not been successful at improving demographic diversity and true inclusion within the upper echelons of their organizations. The status quo seemed unlikely to move, but expectations for corporate firms were upended after the #MeToo Movement of 2017 and 2018, which was followed by corporate support of the #BlackLivesMatter Movement in 2020. These two social movements, while distinct in many ways, forced firms to rethink how to approach the status of women and people of color within their organizations. It forced them to ask, yet again, but with renewed energy: “What is the best way to improve diversity and inclusion within firms?” This Article seeks to contribute to scholarly conversations aimed at addressing that, admittedly elusive, question head-on. It argues that in addition to pursuing the business and legal cases for diversity when crafting diversity, equity, and inclusion (“DEI”) programs, firms should also employ insights from behavioral ethics literature. By utilizing insights from behavioral ethics literature, firms can better prompt decisionmakers to recognize that DEI questions—whether under the business or legal case for diversity—are questions that should be evaluated from an ethical perspective. Scholars and firm leaders have long debated the accuracy of the business case rationale in support of DEI efforts. More recent scholarship has focused on the legal case in support of DEI efforts. This Article recognizes that firms committed to crafting meaningful DEI reforms must focus on both the business and legal cases, but they must reinforce the ethical ramifications of DEI concerns under both frameworks. In short, firms committed to creating a successful DEI program must find ways to evoke ethical framing when engaged in the creation of diverse, equitable, and inclusive organizational cultures

More Meaningful Ethics

Firms have exponentially increased their investment in the creation and implementation of ethics and compliance programs over the past fifteen years. The convergence of more robust corporate enforcement actions and more sophisticated industry standards and practices surrounding compliance efforts has created a booming compliance industry with commonly accepted standards and responsibilities. Within these efforts is a formal acknowledgment by the government, industry leaders, and academics that ethics has a role to play in helping to prevent misconduct within firms and that compliance without concern for ethics is insufficient. The reality, however, is that within firms’ efforts to implement effective ethics and compliance programs, compliance is king and ethics is something far less significant. This Essay questions the wisdom of focusing on compliance without an equal focus on ethics. It challenges academics, industry leaders, compliance officers, and inside and external counsel to think critically about how firms might incorporate “More Meaningful Ethics” within their compliance efforts. This Essay argues that firms should implement specific and explicit ethical infrastructures within their compliance programs. In particular, this Essay suggests that firms commit to adopting policies and procedures that (i) protect the dignity of, (ii) promote the flourishing of, and (iii) advance the interests of the various stakeholders of firms as a baseline to be used for establishing the ethics components of their ethics and compliance programs

On Being First, On Being Only, On Being Seen, On Charting a Way Forward

This Essay reflects upon my professional experiences as a Black woman both at Notre Dame and beyond. It argues that it is important for students to have demographically diverse professors within their educational environments. It calls for the Notre Dame Law School community to continue to create a diverse, equitable, and inclusive culture

The Role of Norms in Modern-Day Government Ethics

Many scholars, policymakers, advocacy groups, members of the media, and citizens-at-large are lamenting the perceived decrease in adherence to norms and ethics by certain government officials over the past few years. Informal mechanisms—whether they be norms, ethics, customs, or a “gentleman’s word”—have long been relied upon to ensure certain standards of behavior within all aspects of society. The American government is no exception. From America’s founding, the rule of law created the backstop for its governmental processes, but the virtue of its leaders remained a constant component of its success. To be fair, the country has seen more than its fair share of dark times; times of great discord, dispute, and division. And when these dark times occur, the questions confronting America are why have her leaders failed her and what should be done in response? This Article seeks to respond, at least in part, to these two questions. It begins by acknowledging that America is in the midst of a crisis of leadership as a result of a failure by government officials to adhere to basic norms and accepted ethical standards. The Article argues that the country’s current predicament is attributable, at least in part, to the failure of stigma to rein in—or serve as a check—on government officials’ behavior. The (i) rise of social media (ii) paired with an increasingly politically polarized environment has crippled the power of social norms to serve as an effective mechanism for encouraging certain types of behavior in government officials. As a result, this Article argues that it is necessary to look for other mechanisms that can be used to fill the gaps left by the failure of social norms to rein in officials’ behavior. This Article discusses three: (i) the adoption of formal legal interventions to shore up and restore certain expectations of acceptable behavior for government officials, (ii) a renewed commitment to the notion that the proper role of the lawyer is that of a professional whose role is to pursue the public good, and (iii) the role of private pressure to facilitate certain expectations of acceptable conduct. When adherence to norms and appeals to ethics fail, it suggests it may be time for law, lawyers, and the public to intervene

Public Reporting of Monitorship Outcomes

When a corporation engages in misconduct that is widespread or pervasive, courts, regulators, or prosecutors often insist that the firm obtain assistance from an independent third party — a monitor — to oversee the firm’s remediation effort. The largest firms in the world — from Deutsche Bank, to Volkswagen, to Carnival Cruise Lines — have found themselves having to retain a monitor for corporate misconduct, despite attempts to avoid a monitorship entirely. Traditionally, monitors, or their special master forebearers, were utilized by courts to assist in overseeing compliance with court orders, and their work was both accessible and transparent. As corporate monitorships have evolved over the past fifteen to twenty years, however, the transparency norm has receded, even when the success or failure of the underlying remediation effort invokes issues of public concern. This lack of transparency would, potentially, be of little concern if the courts, regulators, and prosecutors that are party to monitorships were fully able and willing to ensure the monitorship achieved its goals. The reality, however, is that these governmental actors have demonstrated their own susceptibility to concerns related to cronyism, capture, and, perhaps, competence. Because the governmental actors involved in monitorships have proven to, understandably, lack perfection in their supervision capabilities, the lack of transparency and oversight over monitors and monitorships has prompted public critique, academic debate, and litigation. And yet, it has proven next to impossible to identify a comprehensive manner in which to regulate monitorships. This Article suggests a novel path forward through a mix of federal interventions. The Article argues that at the conclusion of all monitorships, the public should receive an accounting that details whether the firm has or has not engaged in a successful remediation effort. This Article suggests two paths for the public to receive this information: (i) a securities disclosure and (ii) the adoption of a new policy regarding the use of monitors via the Office of Management and Budget. The result of these interventions will be greatly increased public access to information about the conclusion of a firm’s monitorship. All monitors, regardless of type, gather, assess, analyze, and disseminate information, yet this information is often kept outside of the public sphere. This Article presents a piecemeal set of interventions that would help generate the move toward greater public reporting of monitorship outcomes

The Outsized Influence of the FCPA?

The current power and influence of the Foreign Corrupt Practices Act (“FCPA”) is really quite remarkable when one considers the statute was largely ignored for its first twenty-five years of existence. This statute, meant to reign in corruption by United States companies doing business abroad; has generated billions of dollars in revenue for the United States government; prompted the development of law firm practice groups and law school courses; become the subject of numerous scholarly articles; and has, arguably, made anti-bribery efforts the highest of priorities for multinational corporations engaged in robust compliance efforts. Corporations, scholars, and the public would be silly to discount the importance of understanding and maintaining compliance with the FCPA and its international counterparts. And yet, might it be that prioritization of FCPA compliance is misguided in some instances? This Essay argues that governmental actors, industry leaders, corporations, and scholars must critically assess whether the current focus on FCPA compliance has created an environment where the FCPA has developed an outsized influence within corporations’ compliance efforts. This Essay asks firms to consider whether they have become so concerned with ensuring compliance with the FCPA that they sometimes fail to identify other areas of risk that are equally, and in some instances more, serious. Specifically, firms might assess whether they sometimes (i) miss when there are broader deficiencies within their compliance programs; (ii) fail to see trends across compliance areas involving diverse regulatory and legal areas; and (iii) improperly prioritize necessary revisions to their compliance programs after significant misconduct is discovered. Instead of starting with the FCPA when creating a compliance program, this Essay urges firms to assess their risks more broadly and develop compliance programs closely targeted to their risk profiles while paying careful attention not to allow the FCPA to dominate those efforts. By doing so, firms can appropriately guard against potential FCPA compliance failures while also ensuring that they properly consider and address other regulatory and legal areas of concerns