Corporate Conformance in Practice

In recent years, conformance rather than compliance has gained attention in executive suites. While compliance with laws, regulations, statutes, and other formal legal frameworks for corporate activity have been on the agenda for several decades, conformance with norms, values, ethics, and guidelines expected by stakeholders and others in society is recently reaching the top of executive agendas.

An important reason in this shift of attention from compliance to conformance is the speed as well as severity of damage and harm from breaches and violations of the social license to operate, as compared to violations of the legal license to operate.

While a legal process in the criminal justice system at corporate wrongdoing tends to last for years before a final outcome is reached, a social process about corporate misconduct tends to have serious consequences a few days after disclosure, exposure, and condemnation. An example is boycotts of companies, quickly mobilized in social and traditional media, as a reaction to corporate misconduct.

Several measures can be taken to restore corporate conformance. One of them is termination of top executives by making them scapegoats of scandal. Executive dismissal is frequently deployed as a crisis management tactic.