The Principles of Corporate Governance require that business conduct conform to the law. In recent years, news reports of
business misconduct have cast doubt on a conclusion that conformity is the prevalent practice. This article explores the influence
of law on business conduct by comparing the law’s requirements and purposes with actual business conduct in the market. Specifically,
it explores whether certain legal regimes are more effective than others in inducing greater commitment to legal compliance
by corporate actors. The conclusion drawn is that the prevalent legal regime – a vague common law or legislative mandate –
is typically associated with corporate conduct that evades or ignores the law’s mandate or its underlying purpose.
Keywords corporate behavior - Corporate Governance - ethical obligation to comply with law - legal compliance - Organizational Theory
Vincent Di Lorenzo is Professor of Law; Senior Fellow, Vincentian Center for Church and Society, St. John's University; J.D.
Columbia University (Harlan Fiske Stone Scholar); Associate Articles Editor, Columbia Journal of Law and Social Problems.
Before joining the faculty at St. John's University School of Law, Professor Di Lorenzo was a member of the faculty at The
Wharton School, University of Pennsylvania, and was associated with a major Wall Street firm practicing in the real estate-banking
department. He is a member of the American Bar Association and the New York State Bar Association. Professor Di Lorenzo has
authored many articles and books in the banking, legislation and real estate areas.