Ethical business practice and regulation : a behavioural and values-based approach to compliance and enforcement / Christopher Hodges, Professor of Justice Systems, and Fellow of Wolfson College, University of Oxford Head of the Swiss Re/CMS Research Programme on Civil Justice Systems, Centre for Socio-Legal Studies, Oxford, Ruth Steinholtz, Founder and Principal AreteWork LLP, Former General Counsel and Group Security Coordinator, Head of Ethics, Borealis AG.
2017
K1005 .H63 2017 (Map It)
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Title
Ethical business practice and regulation : a behavioural and values-based approach to compliance and enforcement / Christopher Hodges, Professor of Justice Systems, and Fellow of Wolfson College, University of Oxford Head of the Swiss Re/CMS Research Programme on Civil Justice Systems, Centre for Socio-Legal Studies, Oxford, Ruth Steinholtz, Founder and Principal AreteWork LLP, Former General Counsel and Group Security Coordinator, Head of Ethics, Borealis AG.
Published
Oxford, UK ; Portland, Oregon : Hart Publishing, 2017.
Copyright
©2017
Call Number
K1005 .H63 2017
ISBN
9781509916368 (paperback)
1509916369 (paperback)
1509916369 (paperback)
Description
xxxvii, 313 pages ; 24 cm.
System Control No.
(OCoLC)1007505292
Bibliography, etc. Note
Includes bibliographical references and index.
Series
Available in Other Form
Online version: Hodges, Christopher J.S. Ethical business practice and regulation. Oxford [UK] ; Portland, Oregon : Hart Publishing, 2017 9781509916382 (DLC) 2017050984
Record Appears in
Gift
Purchased from the income of the Edith L. Fisch Fund
Added Author
Gift
The Arthur W. Diamond Law Library
Purchased from the income of the Edith L. Fisch Fund
Table of Contents
Acknowledgements
ix
List of Figures, Tables and Boxes
xvii
List of Case Studies
xix
List of Abbreviations
xxi
Preface
xxiii
pt. I
Ideas
1.
Why Do People Conform to Rules or Break Them? Piecing Together the Evidence
3
How the Brain Produces Behaviour
4
Need to Check
5
Bending the Rules
9
People Think They Comply, Even if They Don't
11
Targets, Stress and Mixed Messages
12
Group Culture
14
How Do We Apply This Knowledge?
18
Conclusions
18
2.
Characteristics to Build on
20
Ethics are Innate in Humans
20
Levels of Development of Human Psychological Consciousness and Organisations
21
Importance of Fairness in Observing Rules
24
Conclusions
25
3.
Traditional Way of Enforcing the Law: Deterrence
26
Problems with Deterrence
27
Example of Competition Law
29
Incredible Deterrence
31
Shifts to Enforcement against Individuals
32
Shifts from Deterrence
33
Reputation and Identification
35
What Many UK Enforcers Actually Do
36
Science Not Theory
39
Repressive Society or an Open Collaborative Society?
40
Stages in the Development of Human Society
41
Conclusions
42
4.
Fair and Proportionate Measures
44
Fairness in Response to Wrongdoing: We Don't Just Go Soft
44
Proportionate Responsiveness
45
Case Studies
46
Conclusions
58
5.
Need for Cooperation
59
Cooperation is Essential for Business
60
Adult-Adult Relationship
60
Organisational Structures
62
Monitoring Systems: Constant Circulation of Information
63
Cooperative Model of Regulation
65
Some Examples of Coordination in Regulation
66
Pharmacovigilance System: Multiple Actors
66
Civil Aviation: From Compliance-Based to Performance-Based Regulation
67
Primary Authority Scheme
68
Health and Safety at Work: Making it Everyone's Concern
70
Conclusions
73
6.
Trust Within and in Organisations
75
Compliance with Rules is Socially Constructed
75
Importance of Trust
77
Evidence for Placing Trust
79
Aberrant Personalities: Trust and the Unemotional
81
Shifts in Corporate Values
81
Conclusions
83
7.
How to Learn and Improve Performance: An Open Culture without Blame
84
Blaming Prevents People Sharing Information
85
Root Causes of Accidents
87
Aviation Safety Research
88
Safety Regulation in Civil Aviation
90
Current Approach of the Civil Aviation Authority
92
Accountability and Responsibility in a Just Culture
94
Boards and Just Culture
95
Elusive Open Culture: The NHS
96
Importance of an Educated Public Response
100
Conclusions
101
8.
Why Should We Be Ethical? Ethical Business Practice as Sound Commercial Strategy
102
Social Licence to Operate
102
Job Satisfaction, Focus and Efficiency
103
Financial Rewards of Ethical Culture
104
Ethical Business Practice as a Sound Regulatory Strategy
107
Being Unethical Causes Damage
108
Conclusions
110
pt. II
Where We are Now
9.
Status of Corporate Governance
113
Conflict between Ethics and Profits
113
Mirage of Maximising Shareholder Value
114
Can Corporate Structures Impede Ethical Behaviour?
116
Ethical Structures Tend to Be Open and Flat
117
Corporate Governance and Culture: International Statements
118
Restoring Confidence in the City of London through Corporate Governance and Culture
121
Taking a Long-Term View
123
Room for Improvement in Ethical Business Practice
125
Shortfall in UK Employee Engagement
129
Global Level
131
Conclusions
132
10.
Status of Regulatory Policy
133
Reinterpreting Regulation
133
UK Government Policy on Better Regulation and Enforcement
134
Better Regulation
135
Parallel Expansion in Criminal Law
137
From Enforcement to Behaviour
137
Changed Approaches by Regulators
139
Regulatory Pluralism: Multiple Influences
143
Supporting Self-Assurance by Business
144
Regulators Supporting Business Growth
145
Regulators and Others in Authority: Hindrance or Help?
146
Conclusions
146
pt. III
What is Ethical Business Regulation?
11.
Ethical Business Regulation
149
Establishing EBR
150
Measures of EBP
151
EBR Relationship
154
Responding to Adverse Events: Resisting the Impulse to Blame
156
Conclusions: Reasons to Adopt EBR
159
12.
Developing Examples of Ethical Regulation
161
Civil Aviation
161
Primary Authority Scheme
161
Food Standards
163
Workplace Health and Safety
164
Energy
166
Equality and Human Rights
167
Water in Scotland: Prices and Wider Issues
168
Nuisance Calls in Scotland
170
Bribery and `Adequate Procedures' to Prevent it
171
Product Manufacturers
173
Financial Services: Regulation Will Be Inadequate Without an Ethical Culture
173
Individual Accountability: The Dead End of a Legal Approach
177
Success in Delivering Redress
180
Financial Sector in 2017
181
Emerging Collaboration
181
Conclusions from the Evidence across Different Sectors
183
Harnessing Self-Regulation
184
Conclusions
186
pt. IV
How to Implement Ethical Business Practice and Ethical Business Regulation
13.
Cultural and Leadership Framework for Ethical Business Practice in Organisations
189
Introduction to EBP
189
Primacy of Culture
191
Consciously Managing Organisational Culture
194
Establishing the Organisation's Core Ethical Values
196
Full and Consistent Commitment to Ethical Values
199
Articulated and Inspirational Social Purpose
200
Ethics is Everyone's Responsibility
202
Employee Involvement and Engagement in Fostering Ethical Behaviour
202
Ethics Ambassadors
202
People and Ethos
204
Personalities and Employing the Right People
204
Collaborative Atmosphere
205
Working Together with Stakeholders
205
Performance Management Systems and Incentive Schemes that Support EBP
208
Conclusions
212
14.
Ethics and Compliance Framework: Values Orientation
214
Focusing Mainly on Compliance is Not the Answer
214
Instilling the Ethical Approach: A Shift in Emphasis
216
Values-Orientated Framework
216
Codes of Ethical Business Practice
219
How Do We Know What the Right Thing to Do is?
222
Ethical Dilemmas, Ethical Decision-Making Models and Scenario-Based Training
223
Responding Ethically When under Stress: Time Matters
227
Resources of Information, Education and Advice
228
Promoting an Open Culture and Speaking up
231
When All Else Fails, External Whistleblowing
234
Monitoring, Measuring and Reporting
235
Conclusions
236
Appendices
Appendix 1
EBP in Organisations
237
Questions to Assist Leaders in Implementing EBP
237
Examples of the Types of Evidence That May Be Provided to Support EBP/EBR
238
Appendix 2
Actions to Support EBR
242
Actions by Regulatory and Enforcement Bodies
243
Actions by Government
245
Appendix 3
US Department of Justice's Evaluation of Corporate Compliance Programs: Sample Topics and Questions
246
Notes
253
Index
307