Cross posted with permission from ES Collaborator Jeffrey Kaplan's Conflict of Interest blog

In a post  last week on the Harvard Law School Forum on Corporate Governance and Financial Regulation, Danling Jiang, Associate Professor of Finance at Florida State University, summarizes a recent article she authored with Irena Hutton, Associate Professor of Finance at Florida State University; and Alok Kumar, Professor of Finance at the University of Miami: “Political Values, Culture, and Corporate Litigation,” which was published in the latest issue of Management Science and which “examine[s] whether the political culture of a firm defines its ethical and legal boundaries as observed by the propensity for corporate misconduct.”

In a post  last week on the Harvard Law School Forum on Corporate Governance and Financial Regulation, Danling Jiang, Associate Professor of Finance at Florida State University said of recent research, “Using one of the largest samples of litigation data to date, [they] show that firms with Republican culture are more likely to be the subject of civil rights, labor, and environmental litigation than Democratic firms, consistent with the Democratic ideology that emphasizes equal rights, labor rights, and environmental protection. However, firms with Democratic culture are more likely to be the subject of litigation related to securities fraud and intellectual property rights violations than Republican firms whose Party ideology stresses self-reliance, property rights, market discipline, and limited government regulation.”

This is interesting – if not necessarily surprising – stuff, and particularly so in an election year. But does it bear on the work of C&E professionals? And does it have anything to do with conflicts of interest?

After the financial crisis of 2008 and the current, ongoing instances of large fines levied against banks and other financial companies, many people continually bemoan why penalties have not also included jail time and prosecution of executives who have behaved unethically. The message has finally reached the highest levels of government and change is on the horizon. 

In a speech at NYU Law last week, hosted by the school's Program on Corporate Compliance and Enforcement, Deputy Attorney General Sally Quillian Yates presented the memo covering a new Department of Justice initiative designed to fight corporate fraud and other misconduct by going after individuals who perpetrated the wrongdoing. In addition to punitive actions against an organization (what many see as a macro-level punishment that does little to deter misconduct on the micro, or personal, level), the DOJ will now turn its considerable resources to affecting change at the source, i.e. those that engage in personal malfeasance under the guise of doing their job.

Part of the mission of Ethical Systems is to enhance the work of practitioners and experts in the ethics and compliance field, as they are on the front lines of helping businesses transform their cultures and their employees act more ethically. 

​In a recent interview with Ellen Hunt, Ethics & Compliance Program Director at AARP, she outlined current trends in the Ethics & Compliance (E&C) field as well as the most important steps businesses can take to encourage ethical behavior among organizations of all types and sizes. AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million.