Corporate officers and directors are denominated under the law as fiduciaries. As a result, they must always place the company's interests before their own. To this end, the law imposes two specific duties upon corporate officers and directors: (1) a duty of care; and (2) a duty of loyalty.
The duty of care generally requires that corporate officers and directors act on an informed basis in good faith and in honest belief that their action is in the best interests of the company. Brane v. Roth, 590 N.E. 2d 587 (In. Ct. App. 1993). The duty of loyalty requires that corporate officers and directors place the best interests of the corporation before his or her own interests. E.g., State Ex Rel. Hayes Oyster Co. v. Keypoint Oyster Co., 64 Wash. 2d 375 (Wa. 1964).
Notwithstanding these duties, a fundamental tension exists in the sense that a corporate officer or director may arguably act unlawfully without breaching the duties of care and loyalty. That is, a corporate officer or director may act with due care and in the best (economic) interests of the company, but in a manner which contravenes the law.
As a result of the foregoing, criminality in the corporate context has, in essence, become a business decision. In this respect, the decision-making criteria can be summarized in three words: does crime pay? For instance, in some cases, the fine associated with violation may be less costly than compliance. This is often true in the environmental context where it is often cheaper to pay the fine than to comply with environmental regulations. This may also be true with respect to corporate operations abroad. In many nations, official bribery is an accepted part of doing business. In this respect, the U.S. consequences of engaging in this bribery may be less costly than the loss of revenue from foreign operations that would result in the absence of the bribe.
Thus, the current state of the law appears to be this: if crime pays, then the criminal act is committed, and the corporate actors have complied with their duties of care and loyalty insofar as they have acted on an informed basis and in the best economic interests of the company. On this basis, U.S. companies are increasingly electing to knowingly violate the law. This is confirmed by a recent survey conducted by Deloitte which reveals that one in five executives fear management override of compliance systems. According to the survey, it appears that this increasing trend of corporate criminality can be largely attributed to unrealistic revenue goals and a lack of defined roles and accountability.