2022 COMMENTS & CONTRIBUTIONS | Here We Go Again

Business Law and Ethics Professor Todd Haugh (Indiana University’s Kelley School of Business) joins those offering Good Counsel herein. [Read the article here] Haugh observes that, “approximately once a decade, a highly publicized corporate scandal occurs, there is public outcry, then a broad legislative response, and finally a compliance boom.” But this has not resulted in any less misconduct. Behavioral studies have found that there are “systematic and predictable ways” in which individuals make moral decisions, and these are often contrary to what intuition would suggest. Ethical behaviors spread across social networks much like health-related behaviors, Haugh contends, arguing with Dunbar, Centola, and Paluck. Social network dynamics, and the theories underlying them, have been used in public health to model the spread of disease, Haugh writes. And they can also be used, “to better understand how corporate crime and organizational noncompliance occurs, is fostered, and spreads within companies and across industries.” Haugh encourages us to employ such behavioral science insights in a “public health model” of compliance. 

In an In Focus interview this year, former Secretary General of the Basel Committee on Banking Supervision, Bill Coen, discusses his years of experience confronting financial crises. [Read the article here] Research suggests that a major crisis can be expected once in about every seven years. Among all of those that Coen has witnessed, “an element of deficient corporate governance” was evident. And although each crisis imparted lessons and triggered after-the-fact corrective measures, these most often wind up fostering a false sense of security regarding future resilience, however unintended.