April, 2020

versão em português

Eugene Soltes is a Professor at Harvard Business School where he is dedicated to the study of deviations and fraud in the corporate environment and how organizations develop compliance systems to face these challenges. He is the author of the best seller “Why they do it – inside the mind of the white-collar criminal”, in which he discusses what makes rich and powerful people commit white-collar crimes. Soltes bases his observations on interactions and correspondence he had with about fifty former executives involved in the biggest and most famous corporate crimes in history, as well as new theories in the areas of psychology, criminology and economics. The Author reveals how the best-known theories would fail to explain how so many successful people commit this type of crime. For him, white-collar criminals would not be driven by excessive greed or arrogance, nor would they do a meticulous calculation of costs and benefits before committing a crime. Based on his research, Professor Soltes concludes that most of these executives made corporate diversion decisions in the same way that most people make decisions in everyday life: based on their intuition. However, for him, this intuition would do little for the business world today, where leaders would be increasingly distant from the consequences of their decisions and the people who suffer the impacts.

Eugene Soltes is also the author of several articles on the effectiveness of compliance programs.

Professor Soltes spoke exclusively to CPJM on this subject. Read the interview:

In your book “Why they do it: Inside the Mind of the White-Collar Criminal“, you mention that most white-collar criminals don’t engage in deep thinking or careful consideration when deciding whether to commit a white-collar crime. Nevertheless, with the recent development of the compliance programs, this might have changed or not. In your work, you point out the importance of better measurement so companies can make sure the millions they spend in compliance programs are worth it. Would you say that following the DoJ’s suggestions for evaluating compliance programs is enough?

The DOJ provides a useful set of questions for companies to begin their own evaluations, but notably it’s a series of questions – not answers. Organizations need to think carefully about how their responses actually provide validation that their compliance initiatives and processes are delivering the maximal impact. I’ve discussed training in some of my writing which is a good example where many firms feel that they satisfy the DOJ’s evaluation criteria, but they really are not providing a useful measure of their program’s impact.

From your experience, what kind of mistakes do companies make in attempting to evaluate their compliance program’s effectiveness?

I’d look at my HBR (Harvard Business Review) article with Hui Chen for a variety of specific points here (“Why Compliance Programs Fail—and How to Fix Them”: https://hbr.org/2018/03/why-compliance-programs-fail). More broadly though, most firms do not actual measure. If you don’t measure, you can’t manage the program’s effectiveness. It all begins with making an effort to measure.

What suggestions would you give to those interested in studying and researching white-collar crime and compliance in South America?

What’s fascinating is that corporate criminal liability is now a global phenomena. To understand how the field is evolving and changing I’d look to what is happening in other jurisdictions – US, UK, France, and the Netherlands in particular to understand what is potentially on the horizon.