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When a corporation engages in misconduct that is widespread or pervasive, courts, regulators, or prosecutors often insist that the firm obtain assistance from an independent third party — a monitor — to oversee the firm’s remediation effort. The largest firms in the world — from Deutsche Bank, to Volkswagen, to Carnival Cruise Lines — have found themselves having to retain a monitor for corporate misconduct, despite attempts to avoid a monitorship entirely. Traditionally, monitors, or their special master forebearers, were utilized by courts to assist in overseeing compliance with court orders, and their work was both accessible and transparent. As corporate monitorships have evolved over the past fifteen to twenty years, however, the transparency norm has receded, even when the success or failure of the underlying remediation effort invokes issues of public concern.

This lack of transparency would, potentially, be of little concern if the courts, regulators, and prosecutors that are party to monitorships were fully able and willing to ensure the monitorship achieved its goals. The reality, however, is that these governmental actors have demonstrated their own susceptibility to concerns related to cronyism, capture, and, perhaps, competence. Because the governmental actors involved in monitorships have proven to, understandably, lack perfection in their supervision capabilities, the lack of transparency and oversight over monitors and monitorships has prompted public critique, academic debate, and litigation. And yet, it has proven next to impossible to identify a comprehensive manner in which to regulate monitorships.

This Article suggests a novel path forward through a mix of federal interventions. The Article argues that at the conclusion of all monitorships, the public should receive an accounting that details whether the firm has or has not engaged in a successful remediation effort. This Article suggests two paths for the public to receive this information: (i) a securities disclosure and (ii) the adoption of a new policy regarding the use of monitors via the Office of Management and Budget. The result of these interventions will be greatly increased public access to information about the conclusion of a firm’s monitorship. All monitors, regardless of type, gather, assess, analyze, and disseminate information, yet this information is often kept outside of the public sphere. This Article presents a piecemeal set of interventions that would help generate the move toward greater public reporting of monitorship outcomes.

Library of Congress Subject Headings

Corporation law, Compliance auditing, Disclosure of information