S ta tis tic s

A g re e m e n ts T o F ixP ric e s

N V a lid 1 7

M is s in g 0

Professor Barry J Rodger, University of Strathclyde GlasgowACLE- To Enforce and Comply: Incentives Inside Corporations and Agencies, March 5-6, 2009 barry.j.rodger@strath.ac.uk

Tackles a range of key issues in the debate on compliance and incentives

Corporate Governance Internal Managerial incentives Corporate and individual Crime Whistleblowing, compliance and Law

Enforcement 3 issues- Leslie and ‘faithless agents’;

the Australian compliance study and my UK follow-up study

‘Cartels, Agency Costs and Finding Virtue in Faithless Agents’ C R Leslie [2008] William and Mary Law Review Vol. 49 1621

Fascinating- Christie’s and Sotheby’s- Christopher Davidge, CEO of former- (see the Art of the Steal)

Lysine- Mark Whitacre, division manager of ADM (see the Informant, and forthcoming film- Matt Damon!)

Leslie- destabilise cartels from within… Encourage faithless agents, by decoupling

the interests of principal and agent by:- Increasing severity of individual

punishment for price-fixing; Reward individuals for exposing cartel

activity- immunity and bounties; and Structure law so employees will not trust

employers to protect them should the cartel be exposed

The Australian compliance study- work of Parker and Nielsen

“Do Businesses Take Compliance Systems Seriously?: An Empirical Study of the Implementation of Trade Practices Compliance Systems in Australia”, Melbourne University Law Review, Volume 30, 2006 p 441;

‘How Much Does it Hurt? How Australian Businesses Think about the Costs and Gains of Compliance with the Trade Practices Act’ (2008) Melbourne Uni Law Review 554-608- perceptual deterrence

Nielsen/Parker- To what extent do Third parties Influence Business Compliance? (2008) Law and Society 309-340

3rd party pressure/influence on compliance management- plural compliance motivations?

Considerable worry but little evidence of impact in driving business compliance behaviour, except for risks of complaints

But suggests enforcement agencies can facilitate role of third parties..

Earlier empirical work re compliance (2000 CLLR, 2005 World Competition) (forthcoming European Competition Journal)Study following Australian study-Database of all OFT infringement decisions from March 1 2000 to end 2005

Questionnaires to all organisations which infringed either Competition Act prohibition

Your organisation, the Competition Act 1998 and the OFT; Your knowledge of the 1998 Act; The impact of the Act on your Organisation; Costs and Benefits of Complying with the Act

20 questionnaires returned (33%)- all Chap 1 prohibitions

33% response rate satisfactory, but limited number- 20 in total

Disappointing levels of compliance implementation- note focus of study

Communication and training weak OFT education strategy post 1998-

enhanced carrot and stick approach Further resources dedicated to

information and education re compliance

Business perceptions re compliance important- pluralistic motivations

Support for three key theories- deterrence, moral citizenship, managerial (in)competence

Increase sanctions> greater concern but clearly insufficient

Greater task for OFT including promotion of compliance professionalism

Future research re top 100 UK companies ..??