How the law should regulate companies for more ethical behaviour is a key issue for policy-makers around the world. Organisations are generators of wealth and important providers of public services. But they are also sites for wrongful and sometimes criminal activities, as recent inquiries in Australia have shown.
On Friday, 13 September 2019, the Trust, Ethics and Governance Alliance joined UQ Law (Australian Centre for Private Law) and the Australian Law Reform Commission (ALRC), to host a half-day seminar, The Regulation of Corporate Ethics: Governance in an Age of Inquiries, at the Supreme Court of Queensland.
Chaired by Dr Radha Ivory (UQ Law/TEGA), the seminar brought together researchers from law, economics, and business, as well as a diverse group of governance practitioners. The discussion centred around the challenges of regulating corporate ethics, as well as developments in other jurisdictions and emerging Australian proposals for reforms at the Commonwealth level.
“Australia has long recognised that corporations could be liable for federal crimes”
Dr Ivory explains, drawing from her research on corporate criminal liability and international anti-corruption law. “But there have been real difficulties with the enforcement of those rules in practice. With the ALRC’s current corporate crime reference, we have an important opportunity to chart reforms. So, it is particularly important, at this juncture, that we talk across our sectors and disciplines about the sticking points to corporate accountability and the potential solutions”.
International speaker, Professor Tina Søreide, of the Norwegian School of Economics, in Bergen, started the proceedings with a presentation on corruption, governance, and the economics of corporate enforcement. Professor Søreide’s research shows that combating corruption through criminal law has distinct challenges, especially when misconduct plays out in the operations of large multinational enterprises. These challenges have implications for the design of anti-corruption strategies that are both efficient and effective in combating the harms of corruption to economies and societies.
From the legal sector, speakers from the ALRC and UQ Law School reflected on the value of historical and contemporary models for using the criminal law to control corporate wrongdoing. In his keynote address, Mr Matt Corrigan, General Counsel of the ALRC, drew from Mediaeval Common Law approaches to collective punishment.
An ALRC/UQ Law panel then debated whether criminal sanctions could improve corporate behaviour and culture, given the research of Professor Ross Grantham (UQ Law), Miss Venetia Brown (ALRC), Associate Professor Francesca Bartlett (UQ Law/TEGA), and Dr Vicky Comino (UQ Law/TEGA). TEGA scholars Bartlett and Comino brought insights from the ethical regulation of lawyers and the response of Australia’s corporate regulator to the Hayne Banking Royal Commission. Commenting on ASIC’s new enforcement approach and the Commonwealth’s tougher jail terms and penalties, Dr Comino suggests
“many reasons to doubt that this type of approach will have any meaningful impact”, beyond “appease[ing] the general public and media”.
Leading a session on the organisational challenges of implementing regulations, TEGA scholars shared their expertise on the impact of trust breaches, organisational psychology, and sports sector governance. Professor Nicole Gillespie explored the impact of an apology, drawing on her research on trust and examples from the Royal Commissions into Institutional Responses to Child Sexual Abuse and Banking and Financial Services. Professor Gillespie explains “it is very difficult to repair trust with victims and their supporters, as well as the general public, without acknowledging wrongdoing and apologising for it”.
Exploring Kevin Rudd’s apology to the Stolen Generation, Professor Matthew Horney showcased his research on the importance of apologies even when it is not the actual transgressor who is apologising but a successor or a third party. Professor Horney elaborates: “Members of perpetrator groups tend to think of an apology as the end of a process. But victim groups don’t see it as the end of a process, they tend to see apologies as the beginning of a process … a process of things changing for the better. If the words are followed up with sustained action then the forgiveness will come. But the forgiveness doesn’t happen automatically, and neither should it”.
Associate Professor Sarah Kelly also shared her findings on sports corruption and sporting scandals, exploring the Steve Smith, Tiger Woods and Lance Armstrong cases and the lessons and implications of those stories for the corporate world. Associate Professor Kelly explains, “The augmented lens of sport provides a useful tool for examining the consequences of trust and ethics breaches and the challenges of re-building the sports brand and improving governance”.
Learn more about Trust, Ethics and Governance Alliance.