"BECAUSE THAT'S WHERE THE MONEY IS": A THEORY OF CORPORATE LEGAL COMPLIANCE WILLIAM C. BRADFORD 1. Introduction .................................................................................................... 341 11. Toward a Theory of CLC ............................................................................. 345 A. Personality Theory ........................................................................... 345 1. General Premises and Assumptions .......................................... 345 2. Personality Constructs ............................................................... 346 a. Beliefs ................................................................................. 346 b. Images ................................................................................. 347 c. Values ................................................................................. 348 d. Attitudes .............................................................................. 348 e. Traits ................................................................................... 348 f. M otives ................................................................................ 348 g. Summary ............................................................................. 348 3. M easuring Personality ............................................................... 349 4. Conditionality and Contingency: Other Levels of Analysis ..... 350 B. A Theory of CLC ............................................................................. 351 I. Introduction ......................................................................... 351 2. Independent Variables: Personality Constructs ........................ 351 a. M ilitarism ............................................................................ 351 i. Sub-constructs of M ilitarism ........................................ 352 ii. Summary and Operationalization: M ilitarism ............. 354 b. Anomism ............................................................................. 354 i. Disregard for Law ........................................................ 354 ii. Disregard for Legal Authorities .................................. 355 iii. Amoralism .................................................................. 355 iv. Ignorance of Law ........................................................ 355 v. Ignorance of Corporate Law ........................................ 356 vi. Summary and Operationalization: Anomism ............. 356 c. Hostility ............................................................................... 356 i. Distrust ......................................................................... 356 ii. Narcissism ................................................................... 357 iii. Cynicism .................................................................... 357 338 BUSINESS, ENTREPRENEURSHIP, & THE LAW Vol. Vi:I1 iv. M isanthropy ................................................................ 358 v. Ethnocentrism .............................................................. 358 vi. Hostility ...................................................................... 358 vii. M achiavellianism ...................................................... 359 viii. Lack of Em pathy ...................................................... 359 ix. Selfishness .................................................................. 359 x. Summ ary and Operationalization: Hostility ................ 359 d. Adventurism ....................................................................... 360 i. Tolerance of Risk ......................................................... 360 ii. Internal Locus of Control ............................................ 360 iii. Im pulsivity ................................................................. 360 iv. Anxiety ....................................................................... 361 v. Optim ism ..................................................................... 361 vi. Stress .......................................................................... 361 vii. M ale Sex ................................................................... 361 viii. Summary and Operationalization: Adventurism ...... 361 3. Dependent Variables: Decisions and Outcomes Regarding CLC ......................................................................................... 362 a. Introduction: Corporate Law and Major Sub-regimes ........ 362 b. Operationalization ............................................................... 365 c. Preliminary Hypotheses and Associative Linkages ............ 366 Ill. Personality and CLC: Heuristic Testing of the Theory ............................... 366 A. Data .................................................................................................. 366 1. Enron ......................................................................................... 367 a. CEO Jeffrey Skilling ........................................................... 367 i. IVs: Scores on Personality Constructs ......................... 367 a. M ilitarism ............................................................. 367 b. Anom ism .............................................................. 369 c. Hostility ................................................................ 371 d. Adventurism ......................................................... 372 e. Summary of Independent Variables: Jeffrey Skilling ..................................................................... 373 ii. DVs: CLC and Enron ......................................................... 373 2. W orldCom ................................................................................. 376 a. CEO Bernard Ebbers ........................................................... 376 i. IVs: Scores on Personality Constructs ......................... 376 a. M ilitarism ............................................................. 376 b. Anom ism ..............................................................377 c. Hostility ................................................................ 378 d. Adventurism ......................................................... 379 e. Summary of Independent Variables: Bernard Ebbers ....................................................................... 379 2014 A THEORY OF CORPORATE LEGAL COMPLIANCE 339 ii. DVs: CLC and W orldCom .......................................... 380 3. lm Clone System s ...................................................................... 382 a. CEO Sam W aksal ............................................................... 382 i. [Vs: Scores on Personality Constructs ......................... 382 a. M ilitarism ............................................................. 382 b. Anomism .............................................................. 383 c. Hostility ................................................................ 384 d. Adventurism ......................................................... 385 e. Sum m ary of lVs: Sam W aksal ............................. 386 ii. DVs: CLC and Im Clone System s ................................ 386 4. AIG ............................................................................................390 a. CEO Hank Greenberg ......................................................... 390 i. lVs: Scores on Personality Constructs ......................... 390 a. M ilitarism ............................................................. 390 b. Anom ism .............................................................. 391 c. Hostility ................................................................ 392 d. Adventurism ......................................................... 393 e. Sum mary of lVs: Hank Greenberg ....................... 393 ii. DVs: CLC and AIG ..................................................... 394 5. HealthSouth ............................................................................... 396 a. CEO Richard Scrushy ......................................................... 396 i. lVs: Scores on Personality Constructs ......................... 396 a. M ilitarism ............................................................. 396 b. Anom ism .............................................................. 398 c. Hostility ................................................................ 399 d. Adventurism ......................................................... 400 e. Sum m ary of lVs: Richard Scrushy ....................... 401 ii. DVs: CLC and HealthSouth ........................................ 401 6. Sunbeam .................................................................................... 402 a. CEO Albert Dunlap ............................................................. 402 i. IVs: Scores on Personality Constructs ......................... 402 a. M ilitarism ............................................................. 402 b. Anom ism .............................................................. 404 c. Hostility ................................................................ 404 d. Adventurism ......................................................... 405 e. Summ ary of IVs: Albert Dunlap .......................... 406 ii. DVs: CLC and Sunbeam ............................................. 406 7. Tyco .......................................................................................... 408 a. CEO Dennis Kozlowski ...................................................... 408 i. lVs: Scores on Personality Constructs ......................... 408 a. M ilitarism ............................................................