“Because That\u27s Where the Money Is”: A Theory of Corporate Legal Compliance

The study and regulation of firms per se as agents of compliance may be misguided. Firms are abstractions that exist only in the legal, and not the natural, sense, and, as such, utterly lack decisional capacity. Firms do not decide whether to comply with law; people, specifically officers who exercise decisional authority on their behalf, do. Any theory that would explain or predict firm compliance must account for the individual level of analysis. However, most corporate legal compliance research minimizes the salience of personality. Accordingly, Part II traces associations between personalities of CEOs and firm compliance with obligations arising under corporate law. Part III presents historical data to test heuristically the proffered theory and offer explanations and predictions of firm behaviors regarding corporate legal compliance (CLC). Part IV, followed by a Conclusion, anticipates criticisms and suggests future research to build upon evidence that selection of CEOs on the basis of CLC propensities bears on firm survivability and prosperity, as well as on the orderly and legitimate function of the political economy