Using corporate lawyers to reduce executive corruption: A psycholegal perspective on mandated reporting

This dissertation considers the psycholegal implications of mandatory reporting rules for corporate lawyers implemented in the wake of executive corruption scandals like ENRON and WorldCom. First, the historical development of corporate law and professional conduct rules is explored to highlight the traditional emphasis on the corporate leader's role as the primary corporate decision-maker and the corporate lawyer's role as legal advisor to the corporation through that decision-maker. Then, the contrasting perspective embodied by the reporting mandate of the Sarbanes-Oxley Act of 2002 and the SEC's Rule 205 for the "Implementation of Standards of Professional Conduct for Attorneys" is presented. Following this introduction to the legal side of lawyer-leader interactions, the psychological assumptions underlying the new mandate are examined in light of theory and research related to leadership and culture, role identification, and communication. The examination raises concerns about the "whistleblowing" approach, at least as a primary role, for corporate lawyers who are responsible to help reduce instances of executive misconduct. Finally, this dissertation offers an alternative approach to lawyer-leader interaction, one that might better address the psychological realities and issues that the executive corruption problem implicates. This approach, a combination of therapeutic jurisprudence and preventive law, would retain the primacy of the corporate lawyer's counseling role and would emphasize more assertive and interpersonally-sensitive intervention to prevent wrongdoing.