Publications
Publications
- Fall 2016
- Administrative & Regulatory Law News
The Integrity of Private Third-party Compliance Monitoring
By: Jodi L. Short and Michael W. Toffel
Abstract
Government agencies are increasingly turning to private, third-party monitors to inspect and assess regulated entities’ compliance with law. The integrity of these regulatory regimes rests on the validity of the information third-party monitors provide to regulators. The challenge in designing third-party monitoring regimes is that profit-driven private monitors, typically selected and paid by the firms subject to monitoring, have incentives to downplay problems they observe in order to satisfy and retain their clients. This paper discusses the most important factors that our research and the research of many others has shown can affect the integrity of third-party monitoring and highlights some policy implications for regulators designing third-party monitoring regimes.
Keywords
Regulation; Compliance; Compliance Policies; Conflict Of Interest; Independent Third Party; Inspection; Audit Quality; Auditor; Audit; Environment; Safety; Conflict of Interests; Working Conditions; Labor; Corporate Social Responsibility and Impact; Governance Compliance; Accounting Audits
Citation
Short, Jodi L., and Michael W. Toffel. "The Integrity of Private Third-party Compliance Monitoring." Administrative & Regulatory Law News 42, no. 1 (Fall 2016): 22–25.