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19 U. Pa. J. Bus. L. 285 (2016-2017)
Turning Corporate Compliance into Competitive Advantage

handle is hein.journals/upjlel19 and id is 293 raw text is: 


Robert   C.  Bird*   &  Stephen Kim Park**

     Compliance  is a core concern for corporate governance.  Firms devote
tremendous   amounts of money, personnel, and attention to ensure
compliance   with   regulatory  mandates,   and  yet  compliance   failures
proliferate.  This  is  because  the  current static and  binary  view         of
compliance   hinders  both  efficient compliance  by  firms  and  effective
regulation by  government.   Understanding   the reality that compliance is
both dynamic  and driven by efficiency empowers   firms to evolve past mere
conformance and into wealth maximizing innovation.            This  Article
develops  an  efficient investment-risk (EIR)  model   of compliance   that
captures the tradeoffs between   cost and risk, parses the oft-commingled
concepts of technical efficiency and allocative efficiency, and enables firms
to obtain a competitive advantage  through  compliance.   We  also turn our
attention to regulators and  highlight how   the EIR   model  can  enhance
regulatory  design, foster  regulator-firm cooperation,  and  advance   the
mutual  goals of business and society.

* Professor of Business Law, Eversource Energy Chair in Business Ethics, and Co-Director
of the Corporate and Regulatory Compliance Graduate Certificate Program, University of
Connecticut School of Business.
** Assistant Professor of Business Law and Co-Director of the Corporate and Regulatory
Compliance Graduate Certificate Program, University of Connecticut School of Business.
    Prior versions of this Article were presented at the Symposium on the Preventive and
Positive Roles of Law at the University of Michigan, the Kelley School of Business at
Indiana University, the Robert Zicklin Center for Corporate Integrity at Baruch College -
City University of New York, the Scheller College of Business at the Georgia Institute of
Technology, the 2015 Annual Conference of the Academy of Legal Studies in Business, the
2015 Annual Conference of the North Atlantic Regional Business Law Association, and the
2015 Annual Conference of the Southeastern Academy of Legal Studies in Business. The
authors wish to thank, in particular, Charlotte Alexander, Tom Barton, Karie Davis-
Nozemack, Greg Day, Deven Desai, Lucien Dhooge, Todd Haugh, Tim Lemper, Sarah
Light, Julie Manning Magid, David Orozco, Jennifer Pacella, Jamie Prenkert, Angie
Raymond,  Eric Richards, David Rosenberg, Scott Shackelford, George Siedel, Valerie
Watnick, and David Zaring. All errors and omissions are our own.


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