The inability of compliance strategies to prevent collusive conduct

Abstract

Purpose

The purpose of this paper is to show that cartel conduct is a common example of non‐compliance with competition laws and, in order to generate insight and lessons regarding aspects of corporate governance, two areas of cartel behaviour are to be analysed. The first is the extent to which employees of organisations were aware of the seriousness and illegality of their cartel conduct, and the second is the extent to which determining bodies acknowledged the presence or absence of compliance strategies within corporations being prosecuted for cartel conduct.

Design/methodology/approach

A measurement matrix devised from the literature was used as a methodological framework through which content analysis was conducted to explore whether cartel offenders were aware of the illegality of their behaviour and whether the presence or absence of compliance strategies was acknowledged by the court. In total, 69 publicly available investigatory outcomes sourced from 11 different jurisdictions were analysed.

Findings

The findings suggest a need for competition regulators to educate and raise the awareness of business people to improve understanding of the deleterious effects of cartels and of the provisions of relevant legislation in order to achieve better corporate governance and observance of enacted laws.

Originality/value

In 71 per cent of matters examined, cartel participants were found to be aware of the illegality of their behaviour and, whilst 45 per cent of Australian companies had no compliance programme in place to begin with, some other companies had established compliance programmes which were blatantly ignored by employees.

Citation

Berzins, M. and Sofo, F. (2008), "The inability of compliance strategies to prevent collusive conduct", Corporate Governance, Vol. 8 No. 5, pp. 669-680. https://doi.org/10.1108/14720700810913322