The Deterrent Effects of Ethics Codes for Corporate Crime: A Meta-Analysis

The current financial crisis, brought on in part by the risky and unethical behaviors of investment banks, has drawn attention to corporate crime, particularly on the issue of how to prevent it. Over the last thirty years, codes of conduct have been a cornerstone of corporate crime prevention policies, and consequently are now widespread, especially among large companies. However, the empirical literature is mixed on the effectiveness of codes, leaving them open to critics who charge that codes can be costly to implement, ineffective, and even criminogenic. In this dissertation I use meta-analysis to examine the evidence regarding the preventative effects of ethics codes for corporate crime. The results show that codes and elements of their support system, like enforcement and top management support, have a positive, significant effect on ethical-decision making and behavior. Based on these results, I propose an integrated approach toward self-regulation founded on Braithwaite's (2002) enforcement pyramid, which specifies that regulation should primarily be built around persuasion with sanctions reserved for situations where a stronger deterrent is needed

Corporate Crime Deterrence: A Systematic Review

Corporate crime is a poorly understood problem with little known about effective strategies to prevent and control it. Competing definitions of corporate crime affect how the phenomenon is studied and implications for reducing it. Therefore, in this review, we use John Braithwaite’s definition (1984: 6) which specifies that corporate crime is “the conduct of a corporation, or of employees acting on behalf of a corporation, which is proscribed and punishable by law.” Consistent with this approach, this review focuses on various legal strategies aimed at companies and their officials/managers to curtail corporate crime. Interventions may be punitive or cooperative, but the goal is to prevent offending and increase levels of corporate compliance. Our overall objective is to identify and synthesize published and unpublished studies on formal legal and administrative prevention and control strategies—i.e., the actions and programs of government law enforcement agencies, legislative bodies, and regulatory agencies on corporate crime. We then assess the impact of these strategies on individual and company offending. Included are legal and administrative interventions such as new laws or changes in laws, inspections by regulatory agencies, punitive sanctions and non-punitive interventions aimed at deterring or controlling illegal behaviors