![handle is hein.journals/ndlep29 and id is 1 raw text is:
ARTICLES
CATALYST, OBSTACLE, OR SOMETHING IN
BETWEEN? DEALING WITH THE LAW IN BUILDING
ETHICAL CORPORATE CULTURE
COUNTESS ALEXANDRA* & TIMOTHY L. FORT**
In 2004, Congress amended the organizational chapter of the U.S.
Federal Sentencing Guidelines to require that corporations create
organizational culture[s] leading to etic[s] and compliance in
order to obtain the benefits created in the chapter's encouragement of
compliance systems.1 The amendments occurred after the turn of the
century debacles of companies such as Enron and Worldcom. Congress
recognized that a reflexive governance regime aimed only at punishing
non-compliance misses the levers necessary to create effective compli-
ance systems.2 Paradoxical as it may seem, studies showed companies
that focused on compliance were less effective in complying wit the
law than those organizations that incorporated a non-legal set of ethical
duties and aspirations.3
Many companies have since sought to create more ethical business
cultures4 though the riddle of how to measure such affective dimen-
sions remains difficult-as does knowing exactly what prosecutors and
judges may look for in determining the extent of the ethicality of com-
pany programs.5 Such riddles are worty of inquiry and comprise a
* Countess Alexandra is the Countess of Fredriksborg (Denmark) and is a member
of the Board of Directors of Ferring Pharmaceutical. She serves as the Chair of the
Board's Ethics Committee.
** Professor Fort holds the Eveleigh Professorship of Business Ethics and is Profes-
sor of Business Law at the Kelley School of Business at Indiana University. The authors
wish to acknowledge the research assistance of Jason Allen and Kenneth Burleson in the
preparation of this article.
1. U.S. SENTENCING GUIDELINES MANUAL § 8B2.1(a) (2) (2004).
2. SeeJACOB DAHL RENDTORFF, RESPONSIBILITY, ETHICS AND LEGITIMACY OF CORPORA-
TIONS 354 (2009).
3. Lynn Sharp Paine, Managing for Organizational Integrity, 72 HARV. Bus. REv. 106
(1994); Dov Siedman, Why Companies Shouldn't Do' Compliance, FORBES (May 4, 2012, 11:30
AM), http://www.forbes.com/sites/dovseidmai/2012/05/04/why-ceos-shouldit-do-
compliaice/2/.
4. See, e.g., Pharvnaceutical Company Eli Lilly to Pay Record $1.415 Billion for OffLabel
Drug Marketing, FDA (Jan. 15, 2009), http://www.fda.gov/iceci/criminialinivestigationis/
ucm260967.html; see also Karen L. Stewart & Whiton S. Paine, Johnson &Johnson: An Ethi-
calAnalysis of Broken Trust, 5J. AcAD. & Bus. ETHICS 1 (2012).Johnson &Johnson, which
has long had a heralded culture, was subject to a shareholder derivative suit for aban-
doning the company's commitment to an ethical culture. The company is now seeking to
re-establish that ethical cultural foundation for its compliance program.
5. See Siedman, supra note 3..](ViewImageLocal?handle=hein.journals/ndlep29&div=1&collection=&method=preview&ext=.png&size=3)
What Is HeinOnline?
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most