The goals of this project are to begin new, empirically-based research and analysis on issues related to corporate ethics, law and governance in 2005, begin publishing results in 2006, and maintain a robust research agenda for at least three years. The new Center will operate under the auspices of the RAND Institute for Civil Justice, recognized as the legal think tank at the top (National Law Journal, January 20, 2003) and supported by an array of philanthropic gifts from individuals and corporations.
Undoubtedly, enhanced legal and regulatory scrutiny is intended to promote higher standards of ethical corporate behavior. And indeed, such a goal is clearly desirable for a number of reasons: it increases public trust, it enhances the operation of capital markets, and it can even augment a regulated company's bottom line (through a lower cost of acquiring public capital.)
In the current challenging business and governance environment, empirical research to better understand how businesses can best conduct operations ethically, legally, and profitably at the same time will be tremendously useful to the public and private sectors. The LRN-RAND Center for Corporate Ethics, Law and Governance will also study whether corporate ethics and compliance initiatives can be used not just as an instrument to reduce risk, but also as a means to drive corporate productivity and profitability.
Over time, the Center is intended to become the central repository in the nation for objective, data-driven analysis of the interaction between organizational behavior, law, corporate culture, and business ethics and to serve as a premier resource for policymakers and business leaders interested in improving public and private policy with respect to the institutions that shape corporate ethics.
At the highest level, the center will conduct research on recent reforms, such as Sarbanes Oxley, and their effects on securities litigation, corporate governance, and compensation. But the center must also build a foundation of research on fundamental issues, such as corporate behavior and corporate culture. For example, a better understanding is needed of what companies can and should do to improve ethical behavior. To achieve this, the center will follow the model of prior research on the civil justice system, where debates about tort reform were influenced by supplying research on trends in litigation costs and compensation and how the administration of justice is carried out.