Abstract
LL.M. (Corporate Law)
Commercial transgressions have a significantly negative impact on a large number of people, entire
organisations, economies and society as a whole. These types of transgressions should be studied to
arrive at appropriate and effective responses, which both prevent them from occurring and redress the
harm caused when they do; including determining who should be held responsible.
The individual liability approach to corporate transgressions only recognises individual liability and
therefore proposes that a corporation cannot be held liable. The notion that juristic persons such as
corporations cannot commit transgressions is however no longer followed in a number of
jurisdictions. An increase in corporate crime has led many countries to a realisation that a more allencompassing
approach to corporate liability is required. An enterprise liability approach holds that
the corporation itself deserves to be held liable for its offences and commensurately punished. The
accountability model goes a step further and proposes that all the individuals and parties (including
the corporation) to a transgression should be allocated responsibility.
There are broadly two approaches to attributing blame to a corporation, these being either on a
nominalist or on a realist basis. On a nominalist basis the corporation’s liability arises or is derived
from the actions of individuals within the corporation. The aggregation doctrine is based on the notion
that the liability of a corporation is based on a derivative but collective responsibility.
On a realist basis a corporation can be held liable in its own right, separate from any individual’s
fault. Unlike with a nominalist/derivative liability approach, in terms of a realist or organisational
model approach, a corporation can be held directly liable for its own acts and omissions. An
organisational approach to corporate liability is seen as a workable and practical solution to holding
modern corporations accountable for wrongdoing.
The practices of levying administrative penalties and criminal prosecution are both widely used types
of sanctions to corporate transgressions, although there are other forms of sanctions. To be effective a
combination of sanctions may be warranted. If we are to focus on both deterrence and compliance in
effectively responding to commercial transgressions, we cannot ignore the importance of effective and
well-implemented compliance programmes. The role that regulatory agencies can play in promoting
an understanding of the value of strong corporate codes and effective compliance programmes should
be harnessed ...