Environmental degradation and extractive industry are inextricably linked, and the industry’s adverse impact on air, water, and ground resources has been exacerbated with increased demand for raw materials and their location in some of the more environmentally fragile areas of the world. Historically, companies have managed to control calls for regulation and improved, i.e., more expensive, mining technologies by (a) their importance in economic growth and job creation or (b) through adroit use of their economic power and bargaining leverage against (...) weak national governments, regional and international regulatory bodies. More recently, the industry has had to contend with another set of challenges that involved treatment of indigenous people and their traditional land rights, fair treatment of workers, human rights abuses, and bribery and corruption involving local officials and political leaders. These challenges currently fall outside the traditional areas of regulation and control. Nevertheless, they pose serious threat to the industry’s business practices because of their global scope, threat to company’s reputation, and long-term risks of political instability leading to increasing cost of capital. Industry has responded to these challenges by creating voluntary codes of conduct that would signify their intent to comply with higher standards of conduct, and assuage public opinion that no further action is called for. These codes, however, lack any monitoring mechanism and reporting integrity to assure the public that the industry members are indeed meeting their commitments. Consequently, pressure on the industry continues unabated and with ever increasing calls for mandatory regulation and oversight. This article examines the activities of one mining company, Freeport-McMoRan Copper & Gold, Inc., which has taken a radically different approach in responding to these challenges at its mining operations in West Papua, Indonesia. While cooperating with industry-based efforts of voluntary codes of conduct, Freeport also initiated a radically different response through its own voluntary code that would directly focus on issues of human rights, treatment of indigenous people on whose traditional land its mine was located; economic development and job creation and, improvements in health, education, and housing facilities, to name a few. Additionally, the company earmarked large sums of money and involved representatives of the indigenous people in their management and disbursement. The company took an even more radical action when it committed itself to independent external audits of the company’s compliance with the code, and that these findings and company’s responses would be made public without prior censorship by the company. We analyze the nature of corporate culture, vision and risk-taking propensities of its management that would impel the company to embark on a high risk strategy whose outcomes could not be predicted with any degree of certainty before the fact. The parent company also had to confront discontent among the management ranks at the mine site because of cultural differences and management styles of expatriates and local (Indonesian) managers. Finally, we discuss in some detail the extensive and intensive character of a two phase audit conducted by the outside monitors, their findings, and the process by which they were implemented and reported to general public. We also evaluate the strengths and challenges posed by such audits, their importance to the company’s future, and how such projects might be undertaken by other companies. (shrink)

In recent years, new forms of transnational regulation have emerged, filling the void created by the failure of governments and international institutions to effectively regulate transnational corporations. Among the variety of initiatives addressing social and environmental problems, a growing number of certification systems have appeared in various sectors, particularly agrifood. Most initiatives rely on independent third-party certification to verify compliance with a standard, as it is seen as the most credible route for certification. The effects of (...) third-party audits, however, still need to be empirically investigated. This article provides a critical assessment of the notion of ‘evidence’ which is at the heart of auditing practices. It focuses on the case of the Roundtable on Sustainable Palm Oil (RSPO) and fieldwork carried out in Indonesia, the world’s largest producer of palm oil. In this country, some non-governmental organizations decided to participate in the RSPO in order to use this platform to tackle the issue of land conflicts. They managed to include important clauses regarding indigenous and land rights in the RSPO standard. In practice, however, auditors rarely recognize as valid evidence the forms of proof put forward by local communities. As a result, the whole process risks compounding local power imbalances. (shrink)

Over the last 20+ years, multinational corporations have been confronted with accusations of abuse of market power and unfair and unethical business conduct especially as it relates to their overseas operations and supply chain management. These accusations include, among others, worker exploitation in terms of unfairly low wages, excessive work hours, and unsafe work environment; pollution and contamination of air, ground water and land resources; and, undermining the ability of natural government to protect the well-being of their citizens. MNCs have (...) responded to these accusations by creating voluntary codes of conduct which commit them to specific standards for addressing these issues. These codes are created at both the industry-wide and the individual company level. Unfortunately, these codes have generated little credibility and public trust because their compliance claims cannot be independently verified, and they lack transparency and full public disclosure. In this article, we present a case study of the voluntary code of conduct by Mattel, Inc., the world’s largest toy company. The code, called the Global Manufacturing Principles, confronts the general criticism leveled against voluntary codes of conduct by creating detailed standards of compliance, independent external monitoring of the company’s compliance with its code of conduct, and making full, and uncensored public disclosure of the audit findings and company’s response in terms of remedial action. We present a detailed account of how Mattel’s voluntary code of conduct was created, implemented, and ultimately abandoned over 9 years. We provide an evaluative analysis of the company’s GMP compliance throughout its life span, which suggests a bell-shaped curve, where early top management commitments were met with pockets of resistance from operational groups, who were concerned about balancing GMP compliance efforts with traditional performance criteria. The early stage response from Mattel’s top management was quick and supported with the requisite resources. As a result, the compliance process accelerated, becoming increasingly more robust and effective. The success of code compliance and increased transparency in public disclosure energized field managers with a sense of professional satisfaction and publicly recognized accomplishments. The decline in GMP compliance was equally steep. When all the easily attainable targets had been reached at the company-operated plants, addressing vendor plants’ compliance presented a new set of challenges, which taxed corporate resources and management commitment. It would seem that value-based and ethics-oriented considerations, i.e., doing the right thing for the right reason, were no longer the driving force for Mattel’s management. Mattel did not see any economic benefit from its proactive stance, when competitors did not seem to suffer adverse consequences for not following suit. The final contributing factor to the code’s abandonment was a widely publicized series of product recalls which absorbed top management’s attention. (shrink)

The objective of this study was to analyze the quality of climate information disclosed by companies and the impression management strategies they have developed to justify or conceal negative aspects of their performance. The study is based on a qualitative content analysis of the sustainability reports of 21 energy-sector companies that use the Global Reporting Initiative with A or A+ application levels over a period of 5 years. It contributes to the literature on climate disclosure by demonstrating the ineffectiveness of (...) the external assurance process in ensuring the quality and representativeness of the data. Significant non-compliance with GRI standards was identified in 86 of the 93 reports audited by a third party. In addition, six of the 21 companies surveyed were found to disclose increasingly opaque information over time, concealing information on the measurement and methodology used. Through this study, four impression management strategies were identified. These are employed either to justify certain information or to conceal it. In exposing the high incidence of non-compliance in GRI reporting and the use of impression management strategies by companies, this study shows that it will be difficult or impossible for stakeholders to reasonably assess, monitor and compare companies’ climate performance on the basis of these reports. (shrink)

In recent decades, the governance of food safety, food quality, on-farm environmental management and animal welfare has been shifting from the realm of ‘the government’ to that of the private sector. Corporate entities, especially the large supermarkets, have responded to neoliberal forms of governance and the resultant ‘hollowed-out’ state by instituting private standards for food, backed by processes of certification and policed through systems of third party auditing. Today’s food regime is one in which supermarkets impose ‘private standards’ (...) along the food supply chain to ensure compliance with a range of food safety goals—often above and beyond those prescribed by government. By examining regulatory governance in Australia, Norway and the United Kingdom we highlight emerging trajectories of food governance. We argue that the imposition of the new private forms of monitoring and compliance continue the project of agricultural restructuring that began with government support for structural adjustment schemes in agriculture and that these are most evident in the UK and Australia where neoliberalism is an entrenched philosophy. However, despite Norway’s identity as a social democracy, we also identify neoliberal ‘creep’ into the system of food governance. Small-scale producers in all three nations are finding themselves increasingly subject to governance through private, market-based mechanisms that, to varying degrees, are dominated by major supermarket chains. The result is agricultural restructuring not through the traditional avenues of elected governments, but via non-elected market operatives. (shrink)

Our exploratory study considers whether the internal audit function is an efficient “third line of defense” for risk management and control as proposed by The Institute of Internal Auditors. To that end, we interview chief audit executives and experienced internal auditors to examine whether CAEs manage the impressions of audit committee members in the annual accountability process. We also provide an illustration of impression management techniques through a documentary case that explores a unique and exclusive dataset (...) consisting of the main guidance, framework, and accountability documents of one of these organizations. Our analysis highlights how several macro- and microimpression management techniques were used to burnish the image of internal auditors and, more importantly, the management team. Rather than monitoring managers, the CAEs team up with them. Our findings cast doubts on the conceptualization of internal audit as the independent third line of defense envisioned to be a keystone of the governance mosaic. This study supports other research that questions the effectiveness of internal auditing as a governance mechanism. It also contributes to the impression management literature by exposing impression management practices that occur through a private reporting channel—the internal audit function’s annual accountability to the audit committee. Last but not least, significant ethical concerns are raised in regard to internal audit, and research is urged in that area. (shrink)

Recent scholarship has considered the implications of the rise of voluntary private standards in food and the role of private actors in a rapidly evolving, de-facto ‘mandatory’ sphere of governance. Standards are an important element of this globalising private sphere, but are an element that has been relatively peripheral in analyses of power in agri-food systems. Sociological thought has countered orthodox views of standards as simple tools of measurement, instead understanding their function as a governance mechanism that transforms many things, (...) and people, during processes of standardisation. In a case study of the Australian retail supermarket duopoly and the proprietary standards required for market access this paper foregrounds retailers as standard owners and their role in third-party auditing and certification. Interview data from primary research into Australia’s food standards captures the multifaceted role supermarkets play as standard-owners, who are found to impinge on the independence of third-party certification while enforcing rigorous audit practices. We show how standard owners, in attempting to standardize the audit process, generate tensions within certification practices in a unique example of ritualism around audit. In examining standards to understand power in contemporary food governance, it is shown that retailers are drawn beyond standard-setting into certification and enforcement, that is characterized by a web of institutions and actors whose power to influence outcomes is uneven. (shrink)

We investigate the justifications provided by the Public Company Accounting Oversight Board when sanctioning audit firms and individual auditors, as disclosed in the publicly released Settled Disciplinary Orders. Employing responsive regulation theory, we seek to gain an understanding of violating behaviors by audit firms and individual auditors that attract regulatory responses ranging in nature from persuasive to punitive sanctions. Using 298 SDOs issued by the PCAOB from 2005 to 2020, we find that the frequency and severity of PCAOB (...) sanctions at the firm level are positively associated with auditing standards violations, independence issues, and reckless behavior. At the individual auditor level, integrity violations and reckless behavior are positively associated with the frequency and severity of PCAOB sanctions. Our findings indicate that significantly higher financial penalties for individual auditors arise from manipulation of audit evidence. Further, the PCAOB financially penalizes Big 4-affiliated auditors and firms significantly more than their non-Big 4 counterparts. Other factors such as multiple individuals being implicated in an SDO and whether a firm and individual are both implicated in the SDO are important considerations in sanction imposed by the PCAOB. Overall, our findings suggest that the PCAOB adopts a responsive enforcement strategy when monitoring the auditors in their ethical and audit compliance efforts. (shrink)

People often get angry when they perceive an injustice that affects others but not themselves. In two studies, we investigated the elicitation of third-party anger by varying moral violation and others’ outcome presented in newspaper articles. We found that anger was highly contingent on the moral violation. Others’ outcome, although relevant for compassion, were not significantly relevant for anger or less relevant for anger than for compassion. This indicates that people can be morally outraged: anger can be elicited (...) by a perceived violation of moral values alone, independent of the harm done. A severe negative consequence for others is not necessary to elicit anger. (shrink)

Textile is one of the largest export and source of foreign exchange in Pakistan. For the last two decades, Textile sector is serving as the backbone for Pakistan economy. Several foreign retailers including Target, Jessie Penny, Wal-Mart, and Kohl’s are outsourcing textile and garments from Pakistan. Along with the quality, these retailers are highly concerned with the ethical and social issues of their suppliers, including child labor, forced labor, compensation, working hours and environment health, and safety. My current study is (...) an applied research, based on the problem, regarding the working hours and its proper management in textile factories, mismanagement of which lead to serious issues during social and ethical standard audits. Repetition of which may consequent in termination of business with suppliers and factories. The research hypothesis is that working off the clock will lead to overtime premium not paid and double book record keeping. As far as ethical and social compliance is concerned both overtime premiums not paid and double book records are critical issues during SC audit. A sample of 40 suppliers of Pakistan was randomly selected working with foreign buyers. Secondary data were used to verify the findings based on Audits finding conducted by different third party during a period of 2 years, i.e. Feb., 2010 to Jan., 2012. The results and research findings reflect that during the last 2 years out of 40 factories audit reports 25 factories were found having working off the clock that also lead to overtime premium not paid. However, double book records were not witnessed in all 40 factories SC audit reports as parallel records were not maintained by any factories. The above findings will help the suppliers, factories, and buyers to develop a proactive approach and proper production planning to avoid critical issues and smooth business activities. (shrink)

This article explores the hypothesis that third parties are motivated to seek information about agents who have behaved unethically in the past, even if the agent and available information are irrelevant to the third parties’ goals and interests. We explored two possible motives for this information seeking behavior: deonance, or the motive to care about ethics and justice simply for the sake of ethics and justice, and distrust-based threat monitoring. Participants in a consumer decision task were found (...) to seek out information about an agent who had behaved unethically even when the agent was explicitly excluded from the task; there were no intentions to purchase from the agent; performance expectations for the agent’s product were low; the information that could be sought was non-diagnostic, redundant or irrelevant to an ethical judgment; and alternatives in the market offered as good or better value as the unethical agent. Critically, this information seeking took place even when the observer could disengage from and was not vulnerable to the agent. The findings are discussed in terms of third party information seeking and its effects on ethical behavior in the marketplace. (shrink)

If Badguy threatens Goodguy with harm, and Goodguy consents to giving his money to Badguy (to avoid the harm), Goodguy’s consent is invalid because coerced. But if under Badguy’s coercive threat Goodguy proceeds to consent to paying someone else (or to hiring a bodyguard), the consent may very well be valid. The challenge is to explain this difference. In this paper I argue that the way forward is to recognize that the content of consent is contrastive – one doesn’t just (...) agree to giving the money; rather, one consents to giving-the-money-rather-than-some-alternative. And then the normative upshot of the relevant consent depends on what the morally relevant contrast is, which in turn depends on who is (before the relevant interaction) entitled to what against whom. We have, I think, independent reasons to understand consent contrastively, and once we do, we can solve the puzzle of third party coercion with ease. (shrink)

This paper reviews the experience of 174 of Canada's largest 1500 public and private sector corporations which have begun to incorporate sustainable development management and reporting as part of their operations. Answers are provided to three main questions: Why have they implemented this initiative? What progress has been made in terms of sustainability audit practice – frequency, focus, organization of the audit team –, internal communication, and external reporting? And where has, and will the leadership for the sustainability (...) audit movement come from as why? Sustainable development auditing and reporting in Canada is voluntary. Practice varies from an elementary level to a sophisticated integrated assessment of social, environmental, labour, sourcing and trading, and governance issues. The depth of practice and experience in this area depends on several factors, including: corporate commitment, the degree of public perception of sector-wide environmental issues, exposure to legal liability, and the extent of dialogue and transparency associated with the auditing process. Differences of opinion about accounting and auditing standards as well as whether all, or parts of, audits should be independent are explored. The sources of data used for this paper include the EthicScan Corporate 1500 DataBase, The Corporate Ethics Monitor, various reports prepared by EthicScan Canada, and the consultancies of both authors. (shrink)

Private certification as a means of risk regulation and quality assurance can offer advantages over government regulation, including superior technical expertise, better inspection and monitoring of regulated entities, increased responsiveness to consumers, and greater efficiency. This Article examines two examples of reliable private certification in regulatory arenas - fire safety and kosher food - where political opposition and resource constraints have frustrated government regulatory efforts. The Article identifies key features of reliable private certification and analyzes its comparative institutional advantages (...) over government regulation. Critics of private certification question its legitimacy, asserting that private regulation is less participatory, transparent, and accountable than government regulation. The Article responds to these claims, arguing that the two examples of private certification presented here compare favorably with government regulation based on these criteria of legitimacy. (shrink)

This book analyzes the implementation of CSR reporting and codes of business conduct and ethics in the legal systems of the USA, Austria and China and their enforcement in international supply chain arbitrations. The book demonstrates that long-term profit maximization is increasingly intertwined with corporate ethics and CSR policies. In order to prevent window-dressing and greenwashing, certain control mechanisms and legal standards are required along the entire supply chain. This book introduces an ethics and CSR system recommending a reward-based whistleblowing (...) mechanism, internal oversight by a CSR and Ethics Committee comprised of independent board members and at least one sustainability expert, and an external, independent and comprehensive assurance of CSR reports provided by auditing firms or newly formed governmental agencies consisting of certified CSR experts. The author emphasizes the significance for supply chain leaders to ensure contractual enforcement of their codes of business ethics and conduct along the supply chain. Against this background, the author created a comprehensive fictitious case scenario covering a supply chain dispute arising from the breach of the supply chain leader’s code of business conduct and ethics by a lower-tier supply chain member. The author acknowledges the fact that in most of the cases the governing law of international supply chain contracts is English law or law based on English law. Thus, the author discusses potential contractual claims for damages arising from a loss of profits caused by a loss of reputation resulting from violations of core provisions of the chain leader’s supplier code of conduct pursuant to English law. As international supply chain disputes usually involve more than two parties, and international arbitration is the ideal means for the resolution of these disputes, the book compares the arbitration rules for consolidations and joinders of some of the most significant international arbitration institutions: SIAC, ICC, AIAC, ICDR, VIAC, CIETAC and HKIAC. The book is directed at legal practitioners, legislators of various jurisdictions, board members of corporations, ethics and compliance officers, academics, researchers and students. It is the author’s main goal that the book serves as an inspirational source for the establishment or the improvement of a corporate ethics and CSR system preventing window-dressing and greenwashing and covering the entire supply chain. Furthermore, it is intended that students develop a deeper understanding for the enforcement of corporate ethics and CSR policies. (shrink)

We report the results of a vignette study with an online sample of the German adult population in which we analyze the interplay between need, equity, and accountability in third-party distribution decisions. We asked participants to divide firewood between two hypothetical persons who either differ in their need for heat or in their productivity in terms of their ability to chop wood. The study systematically varies the persons’ accountability for their neediness as well as for their productivity. We (...) find that participants distribute significantly fewer logs of wood to persons who are held accountable for their disadvantage. Independently of being held accountable or not, the needier person is partially compensated with a share of logs that exceeds her contribution, while the person who contributes less is given a share of logs smaller than her need share. Moreover, there is a domain effect in terms of participants being more sensitive to lower contributions than to greater need. (shrink)

Despite the bombardment of AI ethics frameworks (AIEFs) published in the last decade, it is unclear which of the many have been adopted in the industry. What is more, the sheer volume of AIEFs without a clear demonstration of their effectiveness makes it difficult for businesses to select which framework they should adopt. As a first step toward addressing this problem, we employed four different existing frameworks to assess AI ethics concerns of a real-world AI system. We compared the experience (...) of applying the AIEFs from the perspective of (a) a third-party auditor conducting an AI ethics risk assessment for the company, and (b) the company receiving the audit outcomes. Our results suggest that the feel-good factor of doing an assessment is common across the AIEFs that can take anywhere between 1.5 and 20 h to complete. However, each framework provides different benefits (e.g., issue discovery vs. issue monitoring) and is likely best used in conjunction with one another at different stages of an AI development process. As such, we call on the AI ethics community to better specify the suitability and expected benefits of existing frameworks to enable better adoption of AI ethics practice in the industry. (shrink)

We report the results of a vignette experiment with a quota sample of the German population in which we analyze the interplay between need, equity, and accountability in third-party distributive decisions. We asked subjects to divide firewood between two hypothetical persons who either differ in their need for heat or in their productivity in terms of their ability to chop wood. The experiment systematically varies the persons’ accountability for their neediness as well as for their productivity. We find (...) that subjects distribute significantly fewer logs of wood to persons who are held accountable for their disadvantage. Independently of being held accountable or not, the needier person is always compensated with a share of logs that exceeds her contribution, while the person who contributes less is punished in terms of receiving a share of logs smaller than her need share. Moreover, there is a domain effect in terms of subjects being more sensitive to lower contributions than to greater need. (shrink)

Community and patient stakeholder partners serve in many roles. One particularly important role of community and patient organizations and representatives is to serve as gatekeepers; in this role, they monitor, and in some cases even determine, what research does and does not get conducted with their communities. Such gatekeeping can prevent “helicopter” research and community research fatigue. Gatekeeping can also aid in identifying and mitigating harms that might occur not only to individual participants but to third parties (who do (...) not provide consent for participation) or to the community as a whole. Although individual informed consent and independent review both aim to protect against research risks, in research with identifiable communities these protections may be insufficient to protect from other types of harms. Given the gaps in protection, the gatekeeping role of community research partners is an important supplement to informed consent and independent IRB review, but it also raises its own set of ethical challenges. Here, we discuss the limitations of informed consent and independent review in research with identifiable communities, the benefits of gatekeeping for protecting third parties and groups, types of gatekeepers, and issues in the selection of gatekeepers. (shrink)

In this article we explore how multinational corporations (MNCs) adopt assurance practices to develop and sustain organizational accountability for sustainability. Using a panel of Fortune Global 250 firms over a period of 10 years, we document the diffusion patterns of third-party assurance of sustainability reports. We specifically investigate how evolving auditing practices, namely diversity of assurance standards and type of assurance providers, shape the quality of sustainability assurance statements. The results illustrate great variability in the adoption of assurance (...) practices in the formative stages of this novel market. Our descriptive analysis indicates the relevance of external institutional pressure as well as internal resources and capabilities as underlying factors driving the adoption of assurance. Our evidence also suggests that several MNCs project a decoupled or symbolic image of accountability through assurance, thereby undermining the credibility of these verification practices. The paper contributes to the emerging literature on international accountability standards and emphasizes the need to enhance theory-based, cross-disciplinary knowledge related to auditing and accountability processes for sustainability. (shrink)

This article deals with the ordering of interim measures in the arbitration process. Under the Lithuanian law, only one interim measure can be applied by commercial arbitration courts. It involves granting an order to pay the established amount as a deposit. This measure cannot be enforced unless the party acts in good faith and agrees to pay the deposit. However, if a party ignores the decision of the arbitration court, a third party court may apply to (...) the state court with a request to order interim measures provided for in the Lithuanian Code of Civil Procedure. Under the existing Lithuanian legislation, state courts have the exclusive right to order enforceable interim measures. The present situation is not satisfactory and should be changed. The legislator is now considering a new draft law on the Lithuanian commercial arbitration. The draft law provides for changes in ordering interim measures. The proposed regulation is in compliance with the goals of Article 17 of UNICITRAL Model Law on Commercial Arbitration. However, compliance with the rules of UNCITRAL is not the main goal of the proposed regulation. With the new regulation, the legislator aims for more efficient commercial arbitration with more extensive scope that will allow the commercial arbitration court to order interim measures independently. By allowing the commercial arbitration court to order interim measures independently, the legislator extends credibility of arbitration and makes it more inviting for the parties. Under the draft law on the Lithuanian commercial arbitration, state courts and commercial arbitration courts as discretionary institutions shall be entitled to order interim measures. On the other hand, a decision or a ruling of the commercial arbitration court shall be enforced if an execution order is issued by the state court. In this case, the state court shall be entitled to review whether the content of the decision or ruling of the commercial arbitration court complies with the imperative rules of law or public order. According to the proposed draft law on the Lithuanian commercial arbitration, both state and commercial arbitration courts shall have an independent right of discretion to order interim measures. However, some differences exist. In cases heard by commercial arbitration courts interim measures shall be ordered, whereas state courts acting under applications for interim measures filed by the parties or commercial arbitration courts, irrespective of the location of the arbitration process, shall be entitled to order interim measures. (shrink)

The compliance-based approach and the integrity approach have been the mainstream responses to corporate scandals. This paper proposes that, despite each approach comprising necessary elements, neither offers a comprehensive solution. Compliance and integrity, far from being mutually exclusive, reinforce each other. Working together, in a correct relationship, they build a harmonized system that yields positive synergies and which also advocates prudence. It enables the generation of a culture of compliance that tends to minimize the technical and ethical (...) errors in decision making. In order to explore an applied harmonized approach, we analyze the audit committee, a specific and broadly accepted regulatory instrument. Formed by non-executive members, regulation requires these members to be dedicated, qualified, and independent as a guarantee of efficiency. We show how the compound of those elements produces positive effects in a context of solid governance. We conclude that it is the strong relationship between efficiency and prudence, in the creation of a culture of compliance, which enables the minimization of errors. (shrink)

Many transnational corporations and international organizations have embraced corporate social responsibility to address criticisms of working and environmental conditions at subcontractors' factories. While CSR 'codes of conduct' are easy to draft, supplier compliance has been elusive. Even third-party monitoring has proven an incomplete solution. This article proposes that an alteration in the supply chain's governance, from an arms-length market model to a collaborative partnership, often will be necessary to effectuate CSR. The market model forces contractors to (...) focus on price and delivery as they compete for the lead firm's business, rendering CSR observance secondary, at best. A collaborative partnership where the lead firm gives select suppliers secure product orders and other benefits removes disincentives and adds incentives for CSR compliance. In time, the suppliers' CSR habit should shift their business philosophy toward pursuing CSR as an end in itself, regardless of buyer incentives and monitoring. This article examines these hypotheses in the context of the athletic footwear sector with Nike, Inc. and its suppliers as the specific case study. The data collected and conclusions reached offer strategies for advancing CSR beyond the superficial and often ineffectual 'code of conduct' stage. (shrink)

In recent years, to protect the rights and welfare of human subjects, institutions in the USA have begun to set up programmes to monitor ongoing medical research. These programmes provide routine, onsite oversight, and thus go beyond existing oversight such as investigating suspected misconduct or reviewing paperwork provided by investigators. However, because of a lack of guidelines and evidence, institutions have had little guidance in setting up their programmes. To help institutions make the right choices, we used interviews and document (...) analysis to study how and why 11 US institutions have set up their monitoring programmes. Although these programmes varied considerably, we were able to distinguish two general types. ‘Compliance’ programmes on the one hand were part of the institutional review board office and set up to ensure compliance with regulations. Investigators’ participation was mandatory. Monitors focused on documentation. Investigators could be disciplined, and could be obliged to take corrective actions. ‘Quality-improvement’ programmes on the other hand were part of a separate office. Investigators requested to be monitored. Monitors focused more on actual research conduct. Investigators and other parties received feedback on how to improve the research process. Although both types of programmes have their drawbacks and advantages, we argue that if institutions want to set up monitoring programmes, quality improvement is the better choice: it can help foster an atmosphere of trust between investigators and the institutional review board, and can help raise the standards for the protection of human subjects. (shrink)

The Prudent Investor Rule creates a potential ethical dilemma for investment advisors selling over-the-counter financial products issued by their firms. The "opportunity" to defraud investors using complex, over-the-counter derivative securities designed for client-specific risk management is much higher than for exchange traded securities. This paper emphasizes the ethical responsibility held by trustees and their organizations to eliminate potential conflict of interests through internal control and monitoring. Independent evaluations of the performance of investment advisors and independent appraisals of (...) complex over-the-counter securities are important in reducing the risks of conflicts of interest. Recent lessons learned from the corporate ethics crisis and requirements of the 2002 Sarbanes Oxley Act would suggest that conflict of interest must be eliminated with third party validation of derivative pricing. By performing due diligence and validation, the trustee is able to satisfy the requirements under the Prudent Investor Rule. (shrink)

Human risk (the risk of people doing things they shouldn't, or not doing things they should') is the largest single risk facing all organisations -- when things go wrong, there's always a human component, either causing the problem or making it worse. Collectively, companies spend billions trying to manage human risk via functions like Compliance, InfoSec, Risk, Audit, Legal, Human Resources and Internal Comms -- it is people in these functions, as well as those tasked with managing people, (...) that is the target audience for the book. Technology exacerbates the problem by providing each of us with weapons of mass destruction' from a human risk perspective -- even the most junior employee can cause huge damage via their keyboard, either in the work environment or via their personal social media account -- and by taking over basic, repetitive tasks, which mean people are spending more time in human risk sensitive' activities. Traditional approaches to mitigating human risk rely heavily on the idealised presumption that because people are employed, they can simply be told what to do -- this works well in safety-critical environments, where the black & white' parameters of desired outcomes are easy to predict, but is much harder when it comes to grey', less codifiable, areas like ethics which are often difficult to monitor until it's too late and rely on employees being positively engaged. If we want to mitigate the risks posed by human decision-making, then we need to base our approach on an understanding of how humans actually make decisions, which is where Behavioural Science -- a discipline based on academic research and field-tested on real' humans by advertisers, governments and transport authorities -- can help achieve better outcomes. This book is designed to help all those involved in managing human risk to achieve compliance' with a small -- in other words, getting their desired outcome -- and explores how organisations can get the best out of their people by designing frameworks that work with, rather than against, the grain of human thinking. Readers will learn to challenge their existing presumptions about managing human risk and discover practical techniques and examples they can deploy in their work environment. (shrink)

While prior ecolabel research suggests that consumers’ trust of ecolabel sponsors is associated with their purchase of ecolabeled products, we know little about how third-party certification might relate to consumer purchases when trust varies. Drawing on cognitive theory and a stratified random sample of more than 1200 consumers, we assess how third-party certification relates to consumers’ use of ecolabels across different program sponsors. We find that consumers’ trust of government and environmental NGOs to provide credible environmental (...) information encourages consumers’ use of ecolabels sponsored by these entities, and consumers do not differentiate between certified versus uncertified ecolabels in the presence of trust. By contrast, consumers’ distrust of private business to provide credible environmental information discourages their use of business association-sponsored ecolabels. However, these ecolabels may be able to overcome consumer distrust if their sponsors certify the ecolabels using third-party auditors. These findings are important to sponsors who wish develop ecolabels that are more credible to consumers, and thus encourage more widespread ecolabel use. (shrink)

This book examines the legal principle of judicial independence in comparative perspective with the goal of advancing a better understanding of the idea of an independent judiciary more generally. From an initial survey of judicial systems in different countries, it is clear that the understanding and practice of judicial independence take a variety of forms. Scholarly literature likewise provides a range of views on what judicial independence means, with scholars often advocating a preferred conception of a model court for (...) achieving 'true judicial independence' as part of a rule of law system. This book seeks to reorient the prevailing approach to the study of judicial independence by better understanding how judicial independence operates within domestic legal systems in its institutional and legal dimensions. It asks how and why different conceptualisations of judicial independence emerge over time by comparing detailed case studies of courts in two legally pluralistic states, which share inheritances of British rule and the common law. By tracing the development of judicial independence in the legal systems of Malaysia and Pakistan from the time of independence to the present, the book offers an insightful comparison of how judicial independence took shape and developed in these countries over time. From this comparison, it suggests a number of contextual factors that can be seen to play a role in the evolution of judicial independence. The study draws upon the significant divergence observed in the case studies to propose a refined understanding of the idea of an independent judiciary, termed the 'pragmatic and context-sensitive theory', which may be seen in contradistinction to a universal approach. While judicial independence responds to the core need of judges to be perceived as an impartial third party by constructing formal and informal constraints on the judge and relationships between judges and others, its meaning in a legal system is inevitably shaped by the judicial role along with other features at the domestic level. The book concludes that the adaptive and pragmatic qualities of judicial independence supply it with relevance and legitimacy within a domestic legal system. (shrink)

Randomization is an integral part of well-designed statistical trials, and is also a required procedure in legal systems. Implementation of honest, unbiased, understandable, secure, traceable, auditable and collusion resistant randomization procedures is a mater of great legal, social and political importance. Given the juridical and social importance of randomization, it is important to develop procedures in full compliance with the following desiderata: (a) Statistical soundness and computational efficiency; (b) Procedural, cryptographical and computational security; (c) Complete auditability and traceability; (d) (...) Any attempt by participating parties or coalitions to spuriously influence the procedure should be either unsuccessful or be detected; (e) Open-source programming; (f) Multiple hardware platform and operating system implementation; (g) User friendliness and transparency; (h) Flexibility and adaptability for the needs and requirements of multiple application areas (like, for example, clinical trials, selection of jury or judges in legal proceedings, and draft lotteries). This paper presents a simple and easy to implement randomization protocol that assures, in a formal mathematical setting, full compliance to the aforementioned desiderata for randomization procedures. (shrink)

There is a growing realisation that the current upward trend in levels of disclosure of social, ethical and environmental performance by corporations and other organisations is not being accompanied by simultaneous greater levels of public trust. Low levels of confidence in the information communicated in public reporting is probably undermining the impetus for this disclosure. This article suggests that this credibility gap can be narrowed through the use of third party independent assurance. However, this is not an (...) unqualified panacea. Much verification and assurance practice itself has to date been of questionable robustness, reliability and consistency, and has been framed by financial assurance models that are inadequate for the broader, qualitative dimensions of social, ethical and environmental performance. The paper argues that there is need for a universal standard for the provision of assurance of social, ethical and environmental reporting, and indeed for the credibility of the assurance providers themselves. The new AA1000S Assurance Standard, developed by the Institute of Social and Ethical AccountAbility, offers an approach and a tool for addressing these gaps. (shrink)

Although naming-and-shaming (shaming) is a commonly used tax enforcement mechanism, little is known about the efficacy of shaming tax evaders. Through two experiments, this study examines the effects of shaming tax evaders on third-party observers’ perceptions of retributive justice and tax compliance intentions, and whether the salience of persuasion of observers moderates these relationships. Based on insights from defiance theory, the message learning model, and persuasive communications, this study predicts and finds that shaming evaders increases observers’ tax (...) compliance intentions. Furthermore, the results show that higher persuasion, which includes sanction and normative appeals, affects observers’ tax compliance intentions. This study also suggests that shaming has a positive effect on perceptions of retributive justice. Importantly, the results reveal that perceptions of retributive justice in shaming punishment mediate the effect of shaming on tax compliance intentions. The implications for theory and practice are discussed. (shrink)

The paper argues that an ethical firm has cause to realize and to respect, in good faith, the decision of workers regarding labor unions, and proceeds along the following lines. First, the employer is due appropriate deference the bounds of which should be determined in conjunction with employees, as they are the most closely affected party. Second, employee preferences for defining the employment relation and appropriate deference are best reflected through autonomous voice. Third, autonomous voice is assured by (...) the right to free association and generally achieved through labor unions. Fourth, because employment is so important to a dignified existence, an economically just system of employment requires respect for workers’ choice regarding labor unions. And fifth, there are concerns and contradictions that arise from labor union operations, but they do not justify impeding a morally valid prerogative. (shrink)

Capitalizing on a unique setting in China where auditors disclose their prosocial activities, we examine the role that auditor social responsibility plays in shaping their performance. In one direction, behavior consistency theory implies that individual auditors exhibiting more social commitment in their off-the-job activities behave similarly during engagements, enhancing the quality of their audits. In the other direction, accounting firms’ internal structures along with external disciplinary forces mute the impact of heterogeneous auditor characteristics on their performance. In a staggered difference-in-differences (...) design, we report a significant fall in the magnitude of companies’ discretionary accruals and the incidence of financial reporting irregularities after their auditors begin contributing to social welfare, relative to companies whose auditors refrain from contributing during the same timeframe. Additional evidence implies that the higher audit quality stems from auditors better protecting their independence and improving their competence in the post-contribution period. Collectively, our results provide insights into the importance of auditors’ prosocial attitudes to their external monitoring. (shrink)

We argue that, in the case of research biobanks, there is a need to replace the currently used informed consent with trusted consent. Accordingly, we introduce a proposal for the structure of the latter. Further, we discuss some of the issues that can be addressed effectively through our proposal. In particular, we illustrate: i) which research should be authorized by donors; ii) how to regulate access to information; iii) the fundamental role played by a Third Party Authority in (...) assuring compliance with the reciprocal expectations and obligations of donors and scientists. Finally, we briefly analyse two issues that might represent important elements of a ‘new alliance’ between researchers and donors to which the trusted consent could pave the way: i) the correlations between needs and rights of the two parties, and ii) possible economic transactions. (shrink)

Active monitoring of research with human subjects is no longer reserved for especially complex research or investigating research alleged to be problematic. Rather, many human research subjects’ protection programmes now engage in routine monitoring. Although limited data concerning such monitoring are available, the Association for the Accreditation of Human Research Protection Programs , reports that in 2011 its accredited organisations conducted many routine audits .1 While accredited organisations currently represent a small subset of human subjects’ research programmes, (...) these data are consistent with AAHRP's standard : ‘The Organization measures and improves, when necessary, compliance with organizational policies and procedures and applicable laws, regulations, codes, and guidance. The Organization also measures and improves, when necessary, the quality, effectiveness, and efficiency of the Human Research Protection Program.’2In this issue of Journal of Medical Ethics …. (shrink)

This essay is a contribution to the field of institutional studies in that it treats the State as a substantial phenomenon, composed of institutions that require analysis in their own right. Here, the focus is on the political form of African states from the 1960s to the 1980s. On the one hand, I will follow Bourdieu here in insisting that the study of government demands that we know something of the history of political thought (la pensée politique). This simple observation (...) is seldomly applied when it comes to politics in postcolonial Africa. On the other, I use Peter Wagner´s concept of modernity to show that struggles against colonialism and Imperialism and the pursuit of self-determination for African and Asian peoples are unambiguously struggles against domination and for autonomy. The emergence of Third World nationalism (and the Non-Aligned Movement) is an event, therefore, firmly in modernity. So too is the phenomenon of the One-party state in Africa. (shrink)

In the first edition of the Origin of Species, Charles Darwin apologized for not correctly referencing all the works cited in his magnum opus. More than 150 years later we have catalogued these citations and analyzed the resultant data. Looking for a complete selection of collaborators, a flexible interpretation of the term citation was necessary; we define it as any reference made to a third party, independently of its form or function. Following the same idea, the sixth edition (...) of the Origin, originally published in 1872 and reprinted with minor additions and corrections in 1876, was chosen for the research because it represents the end of a long debate between Darwin and his peers. It naturally is the edition with the greatest number of citations and collaborators. Through a diverse theoretical analysis, we aim to present a new perspective for the study of the Origin of Species: a bibliographic approach that provides the tools needed to understand the history of the book as a physical and cultural object. Bibliometrics provides a theory of citations as well as a quantitative analysis; science studies highlights the profound social aspects of science in the making. The analysis resulted in 639 citations to 298 collaborators and provided a new perspective of the rhetorical structure of the Origin, even though these results are only the tip of the iceberg of the potential of all the data gathered in this study. (shrink)

Context: Predicting security and trust vulnerabilities and issues is crucial for IoT interconnected systems and ecosystems, especially when integrating new, third-party or open-source components. Objective: One way to ensure timely predictions is by using a smart monitoring framework to continuously verify functional and non-functional property violations during the executions of the systems and their components. Method: This paper presents a set of guidelines for the Smart Monitoring Framework definition and its application process. Results and Conclusion: The (...) paper provides the reference architecture of the Smart Monitoring Framework and its possible implementation to promptly detect suspicious behavior or property violations. The paper also illustrates how the provided implementation satisfies the defined guidelines by design. (shrink)

This paper discusses three theses of the neo-republican analysis of the market. According to the first, one of the advantages of the market is its impersonality, meaning that no one needs to be tied to others because there are multiple possible partners. If freedom is identified with the lack of personal dependence on the uncontrolled power of third parties, then the market promotes free and horizontal relations. According to the second thesis, market exchanges have something distinctive to preserve freedom (...) because they allow participants to operate through offers instead of penalties. The paper examines various possible meanings of ‘dependence' and ‘independence' and argues, against the traditional interpretation, that personal dependence and penalties are significant aspects but not necessary conditions for domination. We can be exposed to uncontrolled power, thus to domination, even if we have multiple partners to turn to and without anyone being able to threaten or penalise us into accepting a deal. Finally, the third thesis asserts that market competition can nullify domination. The paper argues that domination could exist even with perfect competition. Nevertheless, it concludes by claiming that while we cannot take the three discussed arguments at face value, we must recognise their grain of truth. The market could disperse decision-making capacity, generating new opportunities and efficiency; however, to put it in a slogan: no decentralisation suffices without the effective dispersion of power. (shrink)

This paper examines whether independent directors who have social ties to management (inside directors) can effectively perform their fiduciary duty to monitor management on behalf of shareholders. Ex ante, it is not clear whether social ties will enhance or obstruct the quality of board performance. Theory suggests that directors who are socially tied to management are ineffective and would make decisions favoring management. However, social ties can increase trust and information sharing between management and independent directors, improving directors' (...) ability and effectiveness in governing the company (Westphal, J. D.: 1999, The Academy of Management Journal 42(1), 7-24). To examine these contradicting predictions I use social network analysis and construct proxies for social ties between management and independent board members. Using these proxies, I first demonstrate that social ties are associated with higher managerial compensation. Further analyses reveal that these results are driven by social ties that include members of the compensation committee. Conversely, I demonstrate that financial reporting quality is improved when social ties exist. Specifically, I find that the likelihood of material weaknesses in internal controls and the likelihood of financial restatements are lower in companies with social ties. I further observe that this improved quality of financial reporting holds only when social ties include members of the audit committee. I conclude that ethically, socially tied independent directors should disqualify themselves from serving on compensation committees where social independence is essential. However, in tasks where collaboration with management is essential, directors with social links to each other can be of added value to shareholders. (shrink)

This article examines the construction and implementation of the Sullivan Principles, a two-decade effort to use corporate codes of conduct to improve the behavior of multinational corporations in South Africa under apartheid. Without organized social movement pressure, corporations would not have agreed to adopt the code, and corporate compliance required sustained pressure from the anti-apartheid movement. The system's independent monitoring process was problematic, and managers' definitions of “good corporate citizenship” were more guided by monitors'emphases than by substantive (...) concerns. Based on the historic case, the article raises questions about the voluntaristic, stateless character of transnational corporate codes of conduct and questions whether such codes offer a viable strategy for improving working conditions. (shrink)

This study empirically investigates the dismissal of U.S. CEOs following negative media coverage of environmental, social, and governance (ESG) practices. Extending related literature on the media, ESG, and CEO dismissal, I develop a theoretical framework that considers the media as an influential third party that forms and reflects public opinion about ESG issues. In this role, the media reduces information asymmetry by providing cues on their relative salience and prompting corporate directors to attribute firm-level ESG issues to the (...) CEO, regardless of their involvement in the misconduct. Findings confirm this framework and particularly suggest that coverage of issues in prominent media sources is more likely to result in CEO dismissal. Further, companies that have made public commitments to ESG oversight and those with stronger monitoring are more likely to dismiss the CEO following negative coverage of ESG issues. Overall, this study builds an understanding of how contemporary boards approach the uncertain CEO dismissal decision amidst media coverage of ESG- related misconduct and reflects a shifting norm towards ESG integration at the board-level. (shrink)

Despite increased academic and practitioner interest in codes of conduct, there has been little research into the actual compliance of suppliers in developing countries with the codes of conduct of multinational corporations. This paper addresses this lack by analysing Chinese suppliers' level of compliance with Swedish toy retailers' codes of conduct. Based on unannounced and unofficial interviews with employees of Chinese suppliers, the study shows that all of the nine studied suppliers breached some of the standards in the (...) toy retailers' codes, with over two-thirds of the suppliers not complying with the majority of the studied standards. While there are different explanations of this lack of compliance, the main explanation seems to be that Chinese suppliers successfully deceive toy retailers' monitoring organisations by decoupling the formal monitored part of their organisation from the actual operational part of their organisation. The paper concludes with a discussion of how to increase compliance with MNCs' codes of conduct. (shrink)

This paper examines the study of computer basedperformance monitoring (CBPM) in the workplaceas an issue dominated by questions of ethics.Its central contention paper is that anyinvestigation of ethical monitoring practice isinadequate if it simply applies best practiceguidelines to any one context to indicate,whether practice is, on balance, ethical or not. The broader social dynamics of access toprocedural and distributive justice examinedthrough a fine grained approach to the study ofworkplace social relations, and workplaceidentity construction, are also important here. This (...) has three implications, which are examinedin the paper, and are as follows: First, thatit is vital for any empirical investigation ofthe ethics of CBPM practice to take intoaccount not only its compliance withpreexisting best practice guidelines, butalso the social relations which pervade thecontext of its application. Second, that thisnecessitates a particular epistemologicaltreatment of CBPM as something whose effectsare measurable and identifiable, as well assomething which has a socially constructedmeaning and is tropic in nature. Third, thatexisting debates against which this argument isset, which regard contrasting epistemologiesand ontologies as incompatible, should beaddressed, and an alternative introduced. Introducing situated knowledges (Haraway 1991)and material semiotic ontologies as such analternative, the paper proceeds to analyse theethics of a particular case of monitoringpractice, Norco. Drawing on Marx (1998) thepaper concludes that a fine grain analysis ofthe social is vital if we are to understandfully the ethics of monitoring in theworkplace. (shrink)

We assert that audit quality can be improved to the extent that social norms for honesty and responsibility are activated in the auditor. To test this assertion, we use an experimental audit market setting found in the literature and manipulate factors expected to activate honesty and responsibility norms in the auditor. We find that auditor misreporting is reduced when the investor is another participant in the experiment rather than computer simulated, and thus, the interests of third-party (...) investors are salient to the auditor. We also find that auditor misreporting is reduced when the auditor is required to sign-off on the audit report, but only when the investor is another participant in the experiment. Consistent with our underlying theory, we find that pre-experimental measures of sensitivity to honesty and responsibility norms help explain the effects of our manipulated variables. Finally, we find that these measures of social norm sensitivity are associated with the moral judgment that auditor misreporting is unethical. Our study helps explain previous anomalous findings in the literature and answers the call in Blay et al. (J Bus Ethics 2017. doi:10.1007/s10551-016-3286-4) for empirical researchers to use social norm theory to develop stronger tests of moral reasoning in the market for auditing services. (shrink)

When A wrongs B while C observes, or when B tells C afterward, C might apologize. This could seem to be an imprecise or merely metaphorical use of the word ‘apology’ to refer to an expression of sympathy. But this short paper explains how third-party apologies function as apologies (they restore respect to B, the victim, that was undermined by the wrongdoer A); it explains why such an apology could be morally necessary on C's part; and it provides (...) a preliminary account of the components of a third-party apology. (shrink)

Digital medicine is a medical treatment that combines technology with drug delivery. The promises of this combination are continuous and remote monitoring, better disease management, self-tracking, self-management of diseases, and improved treatment adherence. These devices pose ethical challenges for patients, providers, and the social practice of medicine. For patients, having both informed consent and a user agreement raises questions of understanding for autonomy and informed consent, therapeutic misconception, external influences on decision making, confidentiality and privacy, and device dependability. For (...) providers, digital medicine changes the relationship where trust can be verified, clinicians can be monitored, expectations must be managed, and new liability risks may be assumed. Other ethical questions include direct third-party monitoring of health treatment, affordability, and planning for adverse events in the case of device malfunction. This article seeks to lay out the ethical landscape for the implementation of such devices in patient care. (shrink)

This book proposes, from a civil perspective —such as that developed by Stefano Zamagni— and a cordial perspective —such as that developed by Adela Cortina—, orientations to design an economy in tune with what the historical moment demands. Among other things, this comes from encouraging institutions, organisations and companies to include in their designs aspects as important for carrying out their activities as cordial reciprocity, mutual recognition of the communicative and affective capacities of the linked or linkable parties, public commitment (...) and the active participation of civil society. The book first shows the conceptualisation of the process of self-interest as operating for one’s own benefit and its inclusion in the orthodox economic model. In Chapter 2 it then displays some of the logical/formal and experimental limits of the axiomatic economics model to discover the possibility of building bridges between theoretical modelling and factual validation. Chapter 3 demonstrates the fragility of a rationality model based on the paradigmatic figure of homo oeconomicus. Chapter 4 reflects on the critical process that has identified reciprocity as a determining factor for human cooperation, turning this behaviour into a paradox in which the lack of a reasonable explanation from the selfish perspective becomes inconsistent in the predominant economic theory. Chapter 5 is from a moral point of view it describes and criticises the different approaches to reciprocity observed by sociologists, biologists, psychologists and economists. Chapter 6 analyses three mutual recognition proposals as possible foundations for human cooperation, highlighting one of them –cordial recognition, developed by Cortina– because it is more closely related to studies of reciprocity, particularly the most recent contributions from the neurosciences. Chapter 7 proposes cordial reciprocity as a horizon of meaning for the various approaches to reciprocity observed. Chapter 8 explores the possible emergence and development of cordial goods, a type of relational and communicative good that enables joint actions to take place in different contexts of human activity. Chapter 9 analyses the application and implementation of cordial reciprocity at the macro, meso and micro levels of the economy. And finally, it proposes guidelines for designing a monitoring and compliance system which, based on the communication, storage and processing of big data and the committed participation of stakeholders, offers businesses the possibility of inspecting their underlying dimensions of morality, emotions and responsibility. (shrink)

This study investigates the relations among Machiavellianism, the stakeholder orientation, and Italian managers' support for corporate social and environmental reporting (SER). These relationships have not previously been investigated among a sample of experienced managers but have important implications. As anticipated, Machiavellianism had a strong negative association with the support for SER. Machiavellianism was also negatively related to the stakeholder orientation, which in turn was positively correlated with the support for SER. Support for the stakeholder orientation partially mediated the association between (...) Machiavellianism and SER. The findings advance our understanding of the motivations for sustainability reporting by documenting that managers' fundamental personality traits and economic ideologies are closely associated and are important determinants of normative support for social and environmental disclosures. We further suggest that the results support the case for mandated compliance‐with‐standard sustainability reports coupled with a requirement that such reports be independently audited. (shrink)

The legal requirements and justifications for collecting patient-identifiable data without patient consent were examined. The impetus for this arose from legal and ethical issues raised during the development of a population-based disease register. Numerous commentaries and case studies have been discussing the impact of the Data Protection Act 1998 and Caldicott principles of good practice on the uses of personal data. But uncertainty still remains about the legal requirements for processing patient-identifiable data without patient consent for research purposes. This is (...) largely owing to ignorance, or misunderstandings of the implications of the common law duty of confidentiality and section 60 of the Health and Social Care Act 2001. The common law duty of confidentiality states that patient-identifiable data should not be provided to third parties, regardless of compliance with the DPA1998. It is an obligation derived from case law, and is open to interpretation. Compliance with section 60 ensures that collection of patient-identifiable data without patient consent is lawful despite the duty of confidentiality. Fears regarding the duty of confidentiality have resulted in a common misconception that section 60 must be complied with. Although this is not the case, section 60 support does provide the most secure basis in law for collecting such data. Using our own experience in developing a disease register as a backdrop, this article will clarify the procedures, risks and potential costs of applying for section 60 support. (shrink)