Corporate criminal liability legislation has been the subject of a widespread debate around the world in response to the Önancial scandals of the early 2000s. The existing legal regimes en- tail compliance requirements, such as internal monitoring mechanisms, with the aim of inducing Örms to detect the wrongful conduct of their agents. We develop an analytical framework to address when and to what extent Örms may Önd convenient to adopt these regulatory devices. We conclude that more productive Örms and those operating in sectors where managers have more opportunities to undertake criminal activities are more likely to prevent such activities (through monitoring or the payment of e¢ ciency wages). When the potential returns of ille- gal activities are high or when the Örms are large, implementing internal monitoring devices may be optimal, while smaller Örms should generally prefer the payment of e¢ ciency wages to prevent crimes by managers.

Corporate Criminal Liability and Optimal Behavior by Firms. Internal Monitoring Devices versus Managerial Incentives

POLIDORI, PAOLO;TEOBALDELLI, DESIREE
2012

Abstract

Corporate criminal liability legislation has been the subject of a widespread debate around the world in response to the Önancial scandals of the early 2000s. The existing legal regimes en- tail compliance requirements, such as internal monitoring mechanisms, with the aim of inducing Örms to detect the wrongful conduct of their agents. We develop an analytical framework to address when and to what extent Örms may Önd convenient to adopt these regulatory devices. We conclude that more productive Örms and those operating in sectors where managers have more opportunities to undertake criminal activities are more likely to prevent such activities (through monitoring or the payment of e¢ ciency wages). When the potential returns of ille- gal activities are high or when the Örms are large, implementing internal monitoring devices may be optimal, while smaller Örms should generally prefer the payment of e¢ ciency wages to prevent crimes by managers.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11576/2575780
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