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Improving assessments of compliance failures

Veronica Root Martinez (vrootmartinez@nd.edu) is Associate Professor of Law at Notre Dame Law School in Notre Dame, Indiana, USA.

Compliance in the 21st century is challenging. There are countless handbooks, textbooks, classes, programs, seminars, and magazines all dedicated to explaining and demystifying compliance. These materials valiantly attempt (some more successfully than others) to simplify the complicated legal and regulatory chaos we live in today. Yet despite their best efforts—and despite the best efforts of managers near and far—compliance failures still happen all too often. Some, quite spectacular in their gory details.

You certainly know them: the downfall of Enron, the General Motors ignition switch catastrophe, the Wells Fargo fake accounts debacle, the allegations of sexual harassment at 21st Century Fox—all very notorious compliance failures leading to public outcry and outrage and, in the case of some, a concomitant wave of regulatory change. Yet if history has taught us anything, it is that companies like Enron, General Motors, Wells Fargo, and 21st Century Fox are not alone. Compliance failure is both inevitable and ubiquitous in today’s complex administrative and regulatory environment. And while it is commonly accepted that effective compliance programs will never result in perfect compliance, we certainly can and must do better going forward.

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