Internal Corporate Compliance Management Systems: Structure, Culture and Agency

Abstract

Since the 1970s a number of influential regulatory scholars have suggested that it ought to be possible to empirically identify internal management structures, decision making processes, employee training and other practices that can effectively prevent misconduct in corporations. Moreover, it has been suggested that it should be possible to design government or voluntary regulatory programs that would force or encourage corporations to self-regulate by putting in place these corporate compliance management systems. In this contribution to the edited collection, Explaining Compliance (Parker and Nielsen eds), we briefly describe the main empirical research questions regarding corporate compliance management systems that scholarly regulation literature attempts to answer. These questions concern the extent to which corporations actually do implement compliance systems, why they do so, and what impact, if any, these systems have on compliance behavior. We suggest that in order to answer these questions, it is useful to use the generic sociological concepts of structure, culture and agency. That is, it is important to study the interaction between the adoption of formal systems for compliance management (one component of structure), the perceptions, motivations and strategies of individuals within the corporation in relation to compliance (agency), and the local norms and habituated practices (culture or cultures) that mediate between corporate structures and individual agency. We summarise our own qualitative in depth interview studies of large organizations’ implementation of compliance management systems and other empirical literature on corporate compliance management systems to show how structure and agency interact through culture at three nodes: top management decisions to implement a compliance system; the compliance strategies of specialised compliance managers; and, the ways in which compliance systems are communicated to and experienced by individual employees. The paper concludes by summarizing a preliminary attempt to more systematically identify and test structure, agency and culture in compliance system implementation, and their effects.

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