Chapter 3. The Growth and Evolution of Compliance

"Those who cannot remember the past are condemned to repeat it."

George Santayana

What is now known as corporate compliance is the result of many years of evolution and development. The laws covering businesses have grown over the years in size and scope just as the ways of dealing with these laws have grown more formal and complex. Regulation started slowly in the 19th century and picked up momentum in the ensuing years. This regulation began as a response to individual scandals, and sought to address the underlying causes of each of these scandals. By the 1960s, with increasing complexity in both the business and regulatory arenas, the foundations of modern compliance began to emerge. This trend continued into the 1970s and 1980s, until it reached a tipping point with the release of the Sentencing Guidelines for Organizations in 1991. Compliance programs existed well before these sentencing amendments, but the amendments gave these programs a major push into the mainstream of business. The entire compliance framework only developed further with the passage of the Sarbanes-Oxley Act and the increased importance and role of compliance officers in the 21st century.


In many ways, the history of American business parallels the history of scandal. This history could be accurately described as an ongoing tug of war between regulators who seek to reign in corporate excess and businesses that resist regulation ...

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