Khanna, Vikramaditya --- "An analysis of internal governance and the role of the General Counsel in reducing corporate crime" [2018] ELECD 261; in Arlen, Jennifer (ed), "Research Handbook on Corporate Crime and Financial Misdealing" (Edward Elgar Publishing, 2018) 282

Book Title: Research Handbook on Corporate Crime and Financial Misdealing

Editor(s): Arlen, Jennifer

Publisher: Edward Elgar Publishing

ISBN: 9781783474462

Section: Chapter 12

Section Title: An analysis of internal governance and the role of the General Counsel in reducing corporate crime

Author(s): Khanna, Vikramaditya

Number of pages: 26

Abstract/Description:

This chapter reviews the empirical literature on the factors related to the likelihood and detection of corporate wrongdoing, which increasingly focuses on internal governance, and examines calls to split the traditional tasks of the General Counsel (GC) between the GC and a Chief Compliance Officer (CCO) who reports directly to the Board. The reason for this is to have more independence and expertise in compliance matters than the GC’s office traditionally provides. This chapter argues that although independence is often valuable in reducing wrongdoing, in this context it is likely to come with additional costs that may make gathering information on wrongdoing more difficult. In particular, some employees may be more reluctant to provide information to a CCO than to the GC, and this might sometimes result in increased wrongdoing and weaker operating performance. These deleterious effects, however, might be somewhat ameliorated by institutional and governance design adjustments. This chapter examines what factors may drive likely outcomes and finds that further empirical inquiry would be valuable and suggests some ways in which future research might engage in this inquiry.