bus109

F A L L 2 0 1 7 I S S U E

Todd Haugh

The Trouble With Corporate Compliance Programs Companies with rigorous compliance programs hope such programs will curtail employee wrongdoing. But to prevent employee misconduct, companies also have to understand how employees reach unethical decisions — and what affects their decision-making processes.

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MULTINATIONAL CORPORATIONS spend millions of dollars per year on compliance. In highly regulated industries such as health care and finance, large companies spend much more,

sometimes hiring hundreds or even thousands of compliance officers at a time.1 Siemens AG

reportedly spent more than $1 billion on an in-

ternal investigation related to a government

inquiry into the company’s payment of foreign

bribes.2 But the costs are not just financial. Com-

pliance programs are aimed at eliminating the

time-consuming and distracting regulatory and

legal processes that accompany ethical failures.

There is a belief on the part of corporate lead-

ers that when rigorous compliance programs are

in place, employee wrongdoing will largely dis-

appear. If something does go wrong, the hope is

that having a comprehensive program will help

convince regulators that the company’s compli-

ance and ethics initiatives were “effective” (the

standard set by U.S sentencing guidelines).3

Companies strive to make their programs as

“bulletproof ” as possible. Unfortunately, even

the most comprehensive programs won’t curtail

corporate wrongdoing or the government inter-

vention that follows. For instance, Volkswagen

AG’s compliance program didn’t stop employ-

ees from installing “defeat device” software to

cheat emissions tests, nor did Wells Fargo & Co.’s

The Trouble With Corporate Compliance Programs

B U S I N E S S E T H I C S

Companies with rigorous compliance programs hope such programs will curtail employee wrongdoing. But to prevent employee misconduct, companies also have to understand how employees reach unethical decisions — and what affects their decision-making processes. BY TODD HAUGH

THE LEADING QUESTION How can companies increase the effectiveness of their compliance programs?

FINDINGS �Most programs don’t take into account behavioral compliance best practices.

�Eliminating rationalizations is key to strengthen- ing individual and organizational behavior.

FALL 2017 MIT SLOAN MANAGEMENT REVIEW 55

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56 MIT SLOAN MANAGEMENT REVIEW FALL 2017 SLOANREVIEW.MIT.EDU

B U S I N E S S E T H I C S

policies prevent its employees from opening new cus-

tomer accounts without customers’ authorization.

More than 15 years after the Enron scandal, most

companies know very little about how employees

make ethical decisions or the psychological mecha-

nisms that cause them to perform unethical and

illegal acts. Even fewer companies have compliance

strategies aimed at curbing such behaviors.

The goal of this article is to pull together the bur-

geoning field of behavioral ethics, which provides

insight into how individuals make ethical decisions,

with the work of criminologists who study individ-

ual and corporate criminality. My aim is to help

business leaders see why their corporate compliance

efforts are falling short and how those efforts can be

improved. In addition, I will offer some practical and

cost-effective steps for improving compliance pro-

grams that focus on employee behavior — the best

way to make compliance truly effective.

Dual Systems of Thinking Corporate compliance depends on the behavior of

individual employees. If employees, officers, and

managers always acted in a law-abiding and ethical

manner, compliance failures would rarely occur. Of

course, that is not realistic. That is why companies

need to be aware of how and why employees act the

way they do. This starts with understanding how

people make decisions generally and how that

translates into ethical decision-making.

Contrary to traditional economic theory, peo-

ple don’t make strictly rational decisions. Instead,

as the work of psychologists Daniel Kahneman and

Amos Tversky revealed, most decisions are influ-

enced by dual cognitive processes: intuitive and

reasoning.4 The intuitive process (which Kahneman

and Tversky refer to as System 1) is “fast, automatic,

effor tless, associative, and often emotionally

charged.”5 It operates by associative memory and

habit, which makes it difficult to control or modify.

A lot happens at once through System 1 — the

mind offers associations rapidly, one idea after an-

other, all linked effortlessly. The speed and ease by

which System 1 operates means that “most of the

work of associative thinking is silent, hidden from

our conscious selves.”6

The reasoning process (referred to as System 2)

is more serial and deliberate. It is engaged when we

use thought in an organized manner. We use it to

solve complex math problems, write a paragraph,

or contemplate multifaceted decisions when there

aren’t easy associations to make. System 2 thinking

gives us the “experience of agency, autonomy, and

volition.”7 Not surprisingly, the reasoning process

requires much more mental effort than using

intuition. Reasoning isn’t necessarily better than

intuitive thinking — you wouldn’t want to reason

your way through every one of your day-to-day

tasks — but for the most important decisions, it’s

critical. Yet, because System 2 thinking takes more

effort, our minds have developed to rely primarily

on System 1, reserving System 2 either for the most

challenging mental tasks or to correct errors in our

automatic thinking. This may seem fine, but re-

search shows that people often use System 2 to

justify their System 1 conclusions.8 Instead of cor-

recting errors, sometimes our reasoning process

reinforces our often flawed intuitions.

Although Kahneman and Tversky did not study

ethical decision-making directly, their findings are

critical to understanding how people make deci-

sions in an ethical context. Behavioral ethics

researchers have taken the insights of dual system

thinking and applied them to ethical decision-

making in business. They have found that while

most people intend to act ethically, good people

often do bad things.9 Indeed, research has found

that self-interest is associated with intuitive think-

ing.10 Despite this, most of us act ethically most of

the time. That is because System 2 is properly func-

tioning as an ethical monitor, jumping in to control

the automatic self-interest each of us possesses.11

Rationalizing Unethical Behavior If System 2 is an ethical monitor, why does it seem

to fail so often? For example, what enabled VW em-

ployees to install the code used to defeat emissions

tests? Although behavioral ethics research helps us

understand how the brain works, it doesn’t explain

what allows the brain to take that critical step to-

ward unethical behavior.

This is where criminology, the study of crime

and criminals, comes in. Criminologists research-

ing white-collar crime have theorized that three

conditions are necessary for a corporate crime to

occur.12 First, an individual must possess a problem

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SLOANREVIEW.MIT.EDU FALL 2017 MIT SLOAN MANAGEMENT REVIEW 57

he or she feels cannot be solved by revealing it to

others. A “non-shareable problem” might be any-

thing from gambling debts to the prospect of job

loss — anything that the person is deeply con-

cerned about. Second, the individual must believe

that the problem can be solved in secret by violat-

ing a trust. As corporate leaders know, trust is an

essential element in any organization — almost

every principal-agent relationship is built upon it.

Third, the individual must have an internal dia-

logue about the problem and the unethical — even

illegal — solution that makes the trust violation

seem acceptable.13 The classic example is the banker

who tells himself he is only “borrowing” the em-

bezzled funds and will pay them back later.

The last step, which criminologists call “verbal-

izations” (and the rest of us usually refer to as

rationalizations or even excuses), is the crux of white-

collar crime. Criminologists don’t view verbalizations

as simple, after-the-fact excuses that offenders use to

relieve their culpability upon being caught. Instead,

they see them as “vocabularies of motive” — words

and phrases offenders use to make bad behavior seem

appropriate.14 This means that an offender’s rational-

izations are created before acting and actually allow

the bad act to proceed. As the criminologist who

developed rationalization theory puts it, “[t]he ra-

tionalization is [the offender’s] motivation.”15

Rationalizations, which have been identified in nu-

merous studies, permit white-collar offenders to act in

ways that they would otherwise deem unacceptable.

This is consistent with what we know about how

people make unethical decisions. Behavioral ethics

research does not suggest that everyone wants to act

ethically but fails to do so because of cognitive obsta-

cles. Rather, people default toward acting unethically

because they are driven by self-interest, and then they

find ways to convince themselves — consciously and

subconsciously — that they are acting ethically.16

This appears to be a case of System 2 justifying Sys-

tem 1 conclusions. It’s likely this process is a product

of our unique evolution. Although the ability to co-

operate with one another is one of humankind’s

greatest advantages, the best course of action from an

individual perspective is often to act in one’s self-

interest.17 Thus we have developed mechanisms to

deal with the countervailing aspects of living in our

“hypersocial” yet competitive world.18 One of the

mechanisms is to rationalize our behavior — to

reframe how we look at it in order to align our self-

perception as a “good person” with the unethical or

illegal behavior we are contemplating. There is no

better way to act self-interestedly while simultane-

ously projecting to others (and ourselves) that we are

good members of a cooperative society.

I believe that rationalization theory, which has

greatly influenced the study of both white-collar

crime and business ethics, explains what happens

when an individual’s ethical monitor is overcome.19

Essentially, rationalizations trick the System 2 reflec-

tive thinking process that normally intervenes to

contain our unethicality. Once this happens, there is

nothing to stop a person from committing an unethi-

cal or illegal act, regardless of the organizational

norms, business regulations, or criminal laws in place.

What are the most typical rationalizations? And

more importantly, how do we identify them? My re-

search suggests there are eight rationalizations most

commonly used by those committing unethical and

illegal acts within companies.20 (See “About the Re-

search.”) As part of an effective compliance program,

corporate leaders need to understand these rational-

izations and be able to identify their usage.

Denying Responsibility Offenders use this ratio- nalization to relieve themselves of responsibility,

thereby mitigating social disapproval and a per-

sonal sense of failure. White-collar offenders deny

responsibility by pleading ignorance, suggesting

they were acting under orders, or contending that

larger economic conditions caused them to act

ABOUT THE RESEARCH This article is part of my long-term study of the causes of white-collar crime and corporate wrongdoing. After approximately a decade representing white-collar defendants in state and federal court, advising companies on corporate compli- ance practices, and drafting guidelines to aid federal judges in sentencing fraud offenders, I found that the standard narratives of why businesspeople commit bad acts were misguided. This led me to criminological theory and sociologist Donald Cressey’s groundbreaking study of embezzlers, which revealed the role rationalizations play in violations of organizational trust. Using Cressey’s research as a point of departure, I have undertaken projects analyzing sentencing dispari- ties among economic crime defendants, professional athletes who committed and were victim to fraud, defendants convicted of the theft of cultural heritage resources, and numerous individual and corporate case studies focused on the behavioral aspects of white-collar and organizational crime. Collectively, this re- search has helped me identify prominent rationalizations used by white-collar offenders and confirmed the importance of behavioral insights for effective cor- porate compliance, white-collar sentencing, and criminal legislation.

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B U S I N E S S E T H I C S

illegally. This may be considered the “catch-all” ra-

tionalization leading to wrongful conduct.

Denying Injury This rationalization focuses on the injury or harm caused by the illegal or unethical

act. If an act’s wrongfulness is a function of the

harm it causes, an offender often excuses his or her

behavior if no clear harm exists. Offenders employ

this rationalization when the victim is insured or

the harm is to the public or market as a whole, such

as in insider trading or antitrust cases.

Denying the Victim Denying the victim takes two forms: when the offender argues that the victim’s ac-

tions were inappropriate and therefore the victim

deserved the harm; or when the victim is unknown

or not clearly defined. White-collar offenders often

use this rationalization when committing frauds

against the government, such as in false claims or tax

evasion cases.

Condemning the Condemners This rationaliza- tion shifts attention away from the offender’s

conduct to the motives of others, such as regulators,

prosecutors, and government agencies. It can take

various forms: The offender calls his or her critics

hypocrites, argues that they are compelled by per-

sonal spite, asserts they are motivated by political

gain, or complains about selective enforcement.

Appealing to Higher Loyalties Individuals use this rationalization when they are willing to sacri-

fice societal norms to advance the interests of a

group to which they belong. The actions are

needed, the offender argues, to protect a boss or

employee, shore up a failing business, or maximize

shareholder value. For example, if an employee ar-

gues that he or she committed a fraud not for

personal gain but to help the company, he is or she

is likely using this rationalization.

Using a Ledger Metaphor This rationalization is based on a “behavioral balance sheet” whereby peo-

ple balance their negative actions against their

positive accomplishments, thus minimizing their

sense of moral guilt. Senior executives, particularly

those active in philanthropy, are especially prone to

this type of rationalization.

Claiming Entitlement People involved in em- ployee theft and embezzlement cases frequently use

this rationalization in the belief that they deserve

the fruits of their illegal behavior. This rationaliza-

tion is also common in public corruption cases.

Claiming Relative Acceptability or Normality This rationalization compares the offender’s bad

acts with those of others to relieve moral guilt. Tax

violators and those involved in real estate, account-

ing, and trading fraud often rationalize their

actions by citing the behavior of others. It may be

particularly prevalent when a negative organiza-

tional culture is strong and insulated.

How Rationalizations Undermine Compliance Programs There are plenty of practical examples illustrating

how employees rationalize behavior that leads to

compliance issues. The experiences of Intel Corp.

and Wells Fargo are instructive.

In the early 2000s, Intel adopted an aggressive ap-

proach to compliance in order to curb potential

antitrust violations by its sales executives.21 It de-

vised a program in which the company’s compliance

professionals periodically conducted random audits

in which they searched through papers, emails, and

other electronic records of managers, seizing any-

thing that might be sought as part of a government

investigation. If the company found irregularities, it

sometimes even held mock depositions of the of-

fending executives, using outside antitrust lawyers.

Intel’s general counsel explained that these role-

playing exercises served as a wake-up call, giving lax

executives the experience of being in the govern-

ment’s crosshairs. He boasted that Intel’s aggressive

approach to compliance was “the world’s best.”22

Yet Intel was unable to avoid government inter-

vention in its business. Intel spent years in private

antitrust litigation, and in 2009 the New York at-

torney general sued the company, arguing its

compliance program not only was ineffective but

had helped contribute to illegal anticompetitive

behavior by appearing to have communicated to

employees that the goal of the compliance initiatives

was to limit mention of illegal behavior, rather than

to eliminate the behavior.23 Based on my analysis of

employee emails revealed as part of the lawsuit, the

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company’s approach may have facilitated a host

of rationalizations, including two mentioned

above: denial of injury and denial of the victim. In

addition, employees more easily denied their re-

sponsibility, the catch-all rationalization, because

anticompetitive practices were seen as part of doing

business at Intel.

Wells Fargo’s recent difficulties appear to offer

another example of rationalized corporate wrong-

doing . The company’s fake-account scandal

demonstrates how executives can affect the context

in which employees make decisions regarding ethics.

Details of how exactly the bank’s ethics and compli-

ance program operated are still emerging, but

preliminary reports suggest it allowed an environ-

ment riddled by employee rationalizations. On the

heels of the bank’s $185 million settlement agree-

ment with the Consumer Financial Protection

Bureau, a number of former employees have re-

ported that despite ethics training and messages

from headquarters to not create fake accounts, the

bank’s aggressive sales culture drowned out any

explicit compliance measures. Essentially, the com-

pliance program failed to address the systemic

problem of managers pressuring employees to meet

unrealistic sales goals.24 “The reality was that people

had to meet their [sales] goals,” one former employee

explained. “They needed a paycheck.”25 This suggests

that employees, under pressure to meet unrealistic

goals, rationalized their conduct by denying respon-

sibility and claiming relative normality.

Combating Rationalizations Behavioral science, coupled with criminological

insights, indicates there are complex, interwoven,

and deeply seated psychological processes at work

that can undermine even the best compliance pro-

gram. So what are companies to do? Is there a way

to do compliance better — one that solves some of

the problems created by the automaticity of

self-interest we all possess? Yes, but it requires a

fundamental shift in corporate thinking.

The best approaches to compliance focus not on

how government regulators will react to a compli-

ance initiative but on how employees — the real

“customers” of compliance — will be affected.

They consider the behavioral implications of the

compliance program at every turn, particularly

how company policies might foster or defeat em-

ployee rationalizations. While no program will

entirely change our cognitive processes or stop all

unethical behavior, there are three cost-effective

steps companies can take.

Hire a behavioral specialist. Although dual-

system thinking, rationalization, and behavioral

ethics theories have been around for decades, their

application to business and compliance is still in its

infancy. Hiring a behavioral specialist or develop-

ing someone internally to stay abreast of the

various fields and their increasing insights into eth-

ical decision-making is a good first step.

One of the tasks a behavioral specialist can take on

is to educate the organization, particularly the com-

pliance team and HR staff, on key takeaways from

current research in the fields of behavioral ethics,

behavioral economics, moral psychology, and crimi-

nology.26 Books on decision-making and dishonesty

by serious researchers, yet aimed at more general

readers, can be a helpful resource.27 A company’s

behavioral specialist should create a behavioral com-

pliance curriculum tailored to various groups of

employees, giving all members of the organization

insight into their ethical decision-making processes.

Such a curriculum can become the backbone of a

behaviorally cognizant compliance program.

Use behavioral best practices to eliminate ratio-

nalizations. To create compliance programs that

take advantage of behavioral insights instead of fall-

ing prey to them, companies must start to adopt

compliance practices driven by the behavioral

The compliance program failed to address the systemic problem of managers pressuring employees to meet unrealistic sales goals.

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60 MIT SLOAN MANAGEMENT REVIEW FALL 2017 SLOANREVIEW.MIT.EDU

B U S I N E S S E T H I C S

science at the heart of criminology and behavioral

ethics. This will necessarily go beyond the traditional

law-driven compliance practices employed by the

vast majority of Fortune 500 companies.

If rationalizations are the crux of employee

wrongdoing, then compliance programs should be

aimed at eliminating them. One possibility is to ask

employees to sign a certification before they engage

in behavior that creates compliance risk. A group of

researchers working with an insurance company

asked customers to report how many miles they had

driven that year, according to the odometer.28 Re-

porting lower miles meant lower premiums. But

instead of simply asking for the number of miles, re-

searchers included a certification of honesty at the

top of the form. Customers who certified at the top

of the form, before providing their mileage number,

reported almost 2,500 more miles than those who

signed the same certification at the bottom of the

form, despite there being no difference in driving

habits.29 The certification was effective in reducing

dishonesty because it engaged morality at the mo-

ment of the decision to act ethically or unethically,

just before there was an opportunity to rationalize.

By triggering people’s System 2 ethical monitor at

the correct time, the potential for rationalization was

greatly reduced. Researchers found the same type of

results with tax deduction forms styled like those of

the U.S. Internal Revenue Service.30

A similar approach can be used by companies for

any expense report, conflict of interest form, or funds

authorization — anything in which an employee is

being asked to engage in behavior that creates com-

pliance risk. It’s up to companies to decide how

high-tech they want to get. JPMorgan Chase & Co.

has been developing software that monitors the ac-

tions of its traders, including emails and telephone

conversations, to ensure they “adhere to ‘personal

trading rules’ and risk limits,” and Credit Suisse

Group AG is also working on technology to monitor

traders’ behavior.31 JPMorgan’s effort is noteworthy

in that the software’s algorithms can generate alerts

if it appears that traders may be headed toward an

ethical or legal violation. Such “predictive monitor-

ing,” like a certification at the top of a paper form,

could be used by companies to intervene with a

prompt before a problematic behavior occurs, forc-

ing the employee’s System 2 reasoning system to

engage — and thus improving compliance.

Companies should also encourage employees to

openly discuss rationalizations and how they affect

ethical decision-making. This can be accomplished

through storytelling by employees and the company.

Employees should be encouraged, even required, to

meet periodically in small groups to explore the poten-

tial effects of compliance violations and white-collar

crimes. The idea is for employees, guided by compli-

ance professionals (or, better yet, senior managers), to

discuss topics such as what regulations are relevant to

the business, common compliance pitfalls, and how

some business practices produce externalities that

negatively impact stakeholders. When rationalizing

statements pop up, as they inevitably will, they should

be identified and flagged. Only after patterns of self-

exculpatory rationalization are openly discussed and

labeled as problematic will employees be able to inter-

nalize that knowledge and use it when presented with

an opportunity to act unethically.32

The company also should share stories of genu-

ine compliance successes. Compliance messaging is

most effective when it conveys that positive behaviors

are widely engaged in and approved of within a com-

pany.33 The reason is related to the claim of relative

normality rationalization, which allows individuals

to favorably compare their potential unethical act to

the unethical acts of others. Positive compliance mes-

saging combats this rationalization by demonstrating

that while there may be isolated compliance lapses,

the majority of the company is committed to making

ethical decisions.

Compliance messaging is most effective when it conveys that positive behaviors are widely engaged in and approved of within a company.

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One company that has used storytelling and dis-

cussions effectively in its ethics program is Parsons

Corp., an international engineering and construc-

tion company based in Pasadena, California. The

company hosts an internal website where it has

posed hypothetical ethical problems and asked em-

ployees to vote on how they should be resolved. It

then has published the narrative comments anony-

mously and followed up with a detailed analysis by

the company’s ethics committee. Such practices

serve to unite employees around the company’s val-

ues as applied to real-life scenarios. Through the

narratives, employees themselves identify common

ethical traps and rationalizations.34 Periodically

posing ethics challenges and quizzes to employees

is one of a number of techniques Parsons uses in its

award-winning ethics and compliance program.35

Use incentives to influence behavior in the right

direction. Behavioral ethics research has shown that

even seemingly inconsequential factors can greatly

influence ethical decision-making. This is especially

true when considering how rationalizations can be

drawn from a company’s internal culture, a large part

of which depends on incentive structures. This is one

of the early lessons from Wells Fargo, where the social

and monetary incentives to cross-sell products

swamped the company’s compliance protocols.

What’s more, Wells Fargo is not an isolated example;

prior research has found that when major corporate

trust violations occur, the root cause often has less to

do with a rogue employee than with elements of the

organization that are “dysfunctional, conflicting, or

incongruent.”36 As a result, executives need to be

aware of the common forms of rationalization de-

scribed earlier in this article — and examine where in

their organizations conflicting incentives could foster

rationalization and wrongdoing.

To that end, business leaders can tap nonmonetary

incentives to aid in compliance. According to research,

praise and expressions of gratitude motivate more

than money, and social group interactions motivate

individual behavior more than almost anything.37

That means the most effective compliance likely

comes from something other than salary and bonus.

Research also shows that compliance is most effective

when employees perceive it not as a constraint but as

“the governing ethos of an organization.”38 The goal,

then, is for companies to build a corporate culture

that incentivizes the rejection of rationalizations

through the creation of shared values.

No compliance program will entirely eliminate

bad employee conduct. But behaviorally cognizant

programs, ones that seek to understand employee

decision-making and target the cognitive mecha-

nisms that foster unethicality, hold the promise of

achieving the primary goals of compliance: reducing

unethical and illegal behavior within the company.

Todd Haugh is an assistant professor of business law and ethics at Indiana University’s Kelley School of Busi- ness in Bloomington, Indiana, as well as a Jesse Fine Fellow at the Poynter Center for the Study of Ethics and American Institutions at Indiana University. Comment on this article at http://sloanreview.mit.edu/x/59110, or contact the author at [email protected].

REFERENCES

1. S.J. Griffith, “Corporate Governance in an Era of Compliance,” William & Mary Law Review 57, no. 6 (May 2016) 2102-2103; and R.M. Steinberg, “The High Cost of Non-Compliance: Reaping the Rewards of an Effective Compliance Program” (February 2010, www.securityexecutivecouncil.com.

2. P.J. Henning, “The Mounting Costs of Internal Investigations,” The New York Times, March 5, 2012, http://dealbook.nytimes.com.

3. United States Sentencing Guidelines Manual, chapter 8 (2016), www.ussc.gov.

4. Kahneman and Tversky’s work was popularized with the publication of Kahenman’s 2011 book; see D. Kahne- man, “Thinking, Fast and Slow” (New York: Farrar, Straus and Giroux, 2011), 20-24. However, their work spanned decades. See, for example, D. Kahneman, “Maps of Bounded Rationality: Psychology for Behavioral Econom- ics,” American Economics Review 93, no. 5 (December 2003): 1449-1450.

Executives need to be aware of the common forms of rationalization described earlier in this article — and examine where in their organization conflicting incentives could foster rationalization and wrongdoing.

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62 MIT SLOAN MANAGEMENT REVIEW FALL 2017 SLOANREVIEW.MIT.EDU

B U S I N E S S E T H I C S

5. Kahneman, “Maps of Bounded Rationality,” 1451.

6. Kahneman, “Thinking, Fast and Slow,” 52.

7. P.G. Hansen and A.M. Jespersen, “Nudge and the Manipulation of Choice: A Framework for the Responsi- ble Use of the Nudge Approach to Behaviour Change in Public Policy,” European Journal of Risk Regulation 4, no. 1 (March 2013): 13.

8. Kahneman, “Maps of Bounded Rationality,” 1467.

9. R.A. Prentice, “Behavioral Ethics: Can It Help Lawyers (and Others) Be Their Best Selves?” Notre Dame Journal of Law, Ethics & Public Policy 29, no. 1 (2015): 36.

10. Y. Feldman, “Behavioral Ethics Meets Behavioral Law and Economics,” in “The Oxford Handbook of Behavioral Economics and the Law,” eds. E. Zamir and D. Teichman (New York: Oxford University Press 2014), 8. See also D.A. Moore and G. Loewenstein, “Self-Interest, Automa- ticity, and the Psychology of Conflict of Interest,” Social Justice Research 17, no. 2 (2004): 190.

11. Kahneman, “Maps of Bounded Rationality,” 1467.

12. E.H. Sutherland, “White Collar Crime: The Uncut Version” (New Haven, Connecticut: Yale University Press, 1983), 240. For a succinct discussion of Sutherland’s groundbreaking theories on white-collar crime, see E.H. Sutherland and D.R. Cressey, “A Sociological Theory of Criminal Behavior,” in “Delinquency, Crime, and Social Process,” eds. D.R. Cressey and D.A. Ward (New York: Harper & Row, 1969), 429-443.

13. D.R. Cressey, “The Respectable Criminal: Why Some of Our Best Friends Are Crooks,” Criminologica 3, no. 1 (May 1965): 14-15.

14. Ibid.

15. D.R. Cressey, “Other People’s Money: A Study in the Social Psychology of Embezzlement” (New York: Free Press, 1953), 95.

16. Feldman, “Behavioral Ethics Meets Behavioral Law and Economics,” 17.

17. E. Kolbert, “That’s What You Think: Why Reason and Evidence Won’t Change Our Minds,” The New Yorker, Feb. 27, 2017, 66, citing H. Mercier and D. Sperber, “The Enigma of Reason: A New Theory of Human Understanding” (Cam- bridge, Massachusetts: Harvard University Press, 2017).

18. Mercier and Sperber, “The Enigma of Reason.”

19. S. Maruna and H. Copes, “What Have We Learned from Five Decades of Neutralization Research?” Crime and Justice 32 (2005): 222. See also B.E. Ashforth and V. Anand, “The Normalization of Corruption in Organiza- tions,” Research in Organizational Behavior 25 (2003): 2-5.

20. This section is adapted from a series of articles the author has written concerning white-collar crime and corporate compliance. See, for example, T. Haugh, “The Criminalization of Compliance,” Notre Dame Law Review 92, no. 3 (April 2016): 1255-58; T. Haugh, “Overcriminal- ization’s New Harm Paradigm,” Vanderbilt Law Review 68, no. 5 (October 2015): 1218-1222; T. Haugh, “Sentenc- ing the Why of White Collar Crime,” Fordham Law Review 82, no. 6 (2014): 3165-3169.

21. D.B. Yoffie and M. Kwak, “Playing by the Rules: How Intel Avoids Antitrust Litigation,” Harvard Business Review 79, no. 6 (June 2001): 120-121.

22. Ibid., 120.

23. Complaint, New York v. Intel Corp., No. 1:09-cv-00827- UNA (D. Del. Nov. 4, 2009): 19-20.

24. “Independent Directors of the Board of Wells Fargo & Company Sales Practices Investigations Report” (April 10, 2017): 37-38.

25. M. Corkery and S. Cowley, “Wells Fargo Warned Workers Against Sham Accounts, but ‘They Needed a Paycheck,’” The New York Times, Sept. 16, 2016, www.nytimes.com.

26. See, for example, D. De Cremer and A.E. Tenbrunsel, eds., “Behavioral Business Ethics: Shaping an Emerging Field” (New York: Routledge, 2011), 3-10.

27. R.H. Thaler and C.R. Sunstein, “Nudge: Improving Decisions About Health, Wealth, and Happiness” (New Haven: Yale University Press, 2008); D. Ariely, “The Hon- est Truth About Dishonesty” (New York: HarperCollins, 2012); and Kahneman, “Thinking, Fast and Slow.”

28. L.L. Shu, N. Mazar, F. Gino, D. Ariely, and M.H. Bazer- man, “Signing at the Beginning Makes Ethics Salient and Decreases Dishonest Self-Reports in Comparison to Sign- ing at the End,” Psychological and Cognitive Sciences 109, no. 38 (Sept. 18, 2012): 15198.

29. Ibid.

30. Ariely, “The Honest Truth,” 45-48.

31. P. Crowe, “JP Morgan Is Working on a New Employee Surveillance Program,” Business Insider, April 8, 2015, www.businessinsider.com; and K. Scannell and H. Kuchler, “Palantir and Credit Suisse Join Forces to Target Rogue Traders,” Financial Times, March 22, 2016, www.ft.com.

32. J. Heath, “Business Ethics and Moral Motivation: A Criminological Perspective,” Journal of Business Ethics 83, no. 4 (December 2008): 611.

33. R.B. Cialdini, L.J. Demaine, B.J. Sagarin, D.W. Barrett, K. Rhoads, and P.L. Winter, “Managing Social Norms for Persuasive Impact,” Social Influence 1, no.1 (2006): 13; and S. Killingsworth, “Modeling the Message: Communi- cating Compliance through Organizational Values and Culture,” Georgetown Journal of Legal Ethics 25, no. 4 (fall 2012): 983.

34. Killingsworth, “Modeling the Message,” 983.

35. “Parsons: People. Planet. Progress. 2017 Corporate Social Responsibility Report,” www.parsons.com, 51.

36. R.F. Hurley, N. Gillespie, D.L. Ferrin, and G. Dietz, “Designing Trustworthy Organizations,” MIT Sloan Management Review 54, no. 4 (summer 2013): 75-82.

37. A.M. Grant and F. Gino, “A Little Thanks Goes a Long Way: Explaining Why Gratitude Expressions Motivate Prosocial Behavior,” Journal of Personality and Social Psychology 98, no. 6 (June 2010): 953; Cialdini et al., “Managing Social Norms for Persuasive Impact,” 13.

38. See L.S. Paine, “Managing for Organizational Integ- rity,” Harvard Business Review 72, no. 2 (March-April 1994): 106-107.

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