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Alison Taylor: Compliance could be perfect if it didn’t involve people

For the last several years, academic attention has converged on questions of behavioral ethics, and the findings are robust and sophisticated.

Organizations such as NYU’s Ethical Systems and the Santa Clara University Markkula Center for Applied Ethics provide a wealth of insight, tools and research to help companies access and use the latest thinking to enhance their internal ethics and compliance approaches. All this research takes as its premise that the traditional premise of corporate compliance programs, which is to identify and remove the organization’s “bad apples” is not adequate. In fact, it may delegitimize compliance efforts and have other negative unintended consequences.

While personality is not irrelevant, humans are highly social, goal-oriented and competitive, with limited attention spans. Most compliance programs assume that individuals are rational actors making cost-benefit calculations, deciding to avoid misconduct if they perceive that the likelihood of detection or punishment outweighs the benefit of the wrongdoing. However, a compelling body of research proves that this conceptual frame does not reflect the reality of human behavior.

Worrying about character at the expense of context is therefore a waste of valuable time and effort, and companies can make far greater progress via a structured focus on the cues they are giving employees via their incentive structures, leadership choices, approaches to diversity and inclusion, team goals, and responses to whistleblowers.

Despite all this research and attention, the corporate compliance community has not yet fully taken advantage of this rich research to design and reconsider its approach, and (with some exceptions) has been quite hesitant to undertake extensive internal reviews of culture or behavior and design programs fit to respond. There are now signs that this may be changing, as behavioral integrity finally comes of age.

At the Organisation for Economic Co-operation and Development (OECD) Integrity Forum in March of last year, the OECD concluded that a narrow focus on anti-corruption and fraud prevention has proven insufficient, and companies must broaden their approach to building “cultures of integrity.”

At its 2018 Integrity Forum, the OECD further sharpened its emphasis on how social psychology and behavioral insights can help organizations build and sustain more ethical cultures, via the release of a new paper, Behavioral Insights for Public Integrity, and a 90 minute panel, Ethical Superhumans: Behavioral Insights for Integrity that I was lucky enough to participate in along with several prominent experts in the field. 

Transparency International is also covering this area in its upcoming Day of Dialogue on May 17 in Toronto.

I am also teaching concepts from organizational culture and behavior to Fordham Law School students in a multidisciplinary class called Risk and Responsibility in Organizations.

Todd Haugh, who has written eloquently about the problems with corporate compliance programs as they are currently conceived, argues that companies should hire behavioral specialists into their compliance teams. In an era of spiralling responsibilities and cost pressure, this may not be realistic for most companies. However, training compliance officers to understand and identify behavioral risk factors, and on wider team and group dynamics that may indicate ethical challenges, is easily achievable via creative interactive training modules.

By equipping compliance teams with these insights and tools, they will be able to supercharge their programs to take full advantage of the latest thinking, and save time, money, and effort in the process.


Alison Taylor is managing director of advisory services at BSR, a non-profit consultancy and company network focused on sustainability and CSR. She’s the author of the working paper, The Five Levels of an Ethical Culture. Her article, “5 Signs Your Organization Might Be Headed for an Ethics Scandal,” appeared in the December 18, 2017 of the Harvard Business Review. She can be contacted here.

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  1. Behavioral integrity … Behavioral risk factors ….ethical challenges … well well … pretty words.

    But the headlines are scarily correct.

    Your not going to like my words.

    The fact has been apperant for hundreds of years that humans are homo intermitten sapiens og we are driven by motivation and use rules as guidlines … even and also laws.

    If you really want it to work you have to give company´s and individuals motivation to show due diligence and motivation to refain from nefarious deeds. Punishment is useless … nobody expects to be caught and even then most do not truly realise that they did anything wrong.

    Every banker in the world has explation for his conduct… so do the politican and officials… and pretty much everybody.

    You really think Panama Papers and related mediashow did much good ???? Look again. They just changed their preferred way´s of operating. Semilegal.. legal and illigal are very close.

    Corruption is found at the lowest levels… even in the daily life… it´s motivated by the same forces as the big one´s. You don´t bribe with money at low levels .. it´s called doing a favor and of course there is the common insurance of silence regarding common interests.

    Preferred methoid is silence… then you can sleep easily knowing it will never go to the courts.

    You can´t changed the human being… takes direct´s DNA changes to change what drives us…so all your victory´s are in wain. Sad …. but true.

    Suggest you look again and better at what´s the driving forces if you really want to change state of minds.

    Because we just find another loophole if one is closed.

    Fer crying out loud ! it´s been going on for hundreds of years and you are still using the same shovel !

    But then again I could be wrong… it can also snow in Hell.

    But I love the blog… quite entertaining.

  2. I have not read a better argument against the creation of compliance silos. Compliance without the human face doesn't work in the long term.

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