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Assess The Difference Between Regulatory Compliance And Decision Making

Decent Essays
Furthermore, under the TPM, it is the team and not directors that have the greater economic incentive to comply with rules. Firstly, a distinction must be made between regulatory compliance and the types of decisions outsourced to directors. The director’s power is to balance competing interests of an internal nature such as: compensation and allocation of duties. This is by design as the team is unable to resolve internal disputes due to the incentive for individuals to increase their personal utility by engaging in shirking and rent seeking. In contrast, this essay argues, compliance issues are of an external nature. That is, the conflict is not between team members but with a third party (e.g. ASIC). As noted by Schweller, the emergence
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