Thursday, May 7, 2015

Why Do Corporate Executives Do What They Do?

As I begin my guest spot here at Business Law Profs Blog, I’ve really enjoyed reading the recent posts by Ann Lipton (here) and Marcia Narine (here) on corporate whistleblowers.  What has always fascinated me about whistleblowers is the “why” question: why do they do it knowing all the negatives—to their career, their family, their psyche—in store for them? 

While I don’t have any great insights as to the answer (although others do), trying to figure out why corporate executives do what they do—particularly in the realm of business ethics and white collar crime—is something I’ve been focused on for a while, first as a white collar criminal defense attorney and now as an academic.  One way I’ve tried to look at the issue is by pulling together disciplines that provide some understanding of why business people commit bad acts and what our collective response to that should be.  This has led me primarily into the areas of criminology, behavioral ethics, and federal sentencing.  And what emerges from that soup, at least for me, is the concept of rationalization—that very powerful, and very human, way of viewing oneself positively (say, as an upstanding citizen, family man, etc.), while taking actions inconsistent with that view according to society’s standards (say, by passing a stock tip to a friend, misrepresenting your company’s financials, etc.).  I see rationalization as the critical step in the commission of white collar crime, and thus what should be the focus of our corporate compliance and white collar crime enforcement efforts. 

Over the next few posts, I’ll try and flesh out these ideas, explaining how rationalizations operate, their most common iterations in the white collar world, and how our current regulatory and corporate compliance efforts, by failing to consider the role of rationalizations, might actually be leading to more corporate wrongdoing. 

Stay tuned.

Ethics, White Collar Crime | Permalink


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