“Prosecutors in the boardroom” is a slogan reflecting an unintended early 21st century overlap of corporate governance and corporate criminal liability. Although exaggerated, the phrase reflects how prosecutors increasingly demand corporate governance reforms when settling criminal cases using deferred prosecution agreements (DPAs). While a growing body of scholarship seeks to put governance beyond the purview of prosecutors, ousting prosecutors from the boardroom, I explain why prosecutors should consider governance carefully in determining how to proceed ex ante and state rationales for governance changes in DPAs ex post.
Prosecutorial failure to consider governance ex ante can have adverse consequences, including activating governance mechanisms not designed to the purpose and imposing on corporate actors to hastily adopt changes they would ordinarily evaluate dispassionately. Subsequent prosecutorial prescriptions of governance changes are rarely the product of articulated rationales and can seem like ransoms or trophies created on the fly by prosecutors seeking victory. Irreconcilable criticisms result: some say DPAs are coerced extractions of overzealous prosecutors, others that they are mere whitewash that let corporate crooks off the hook.
Prosecutors should publicly articulate the rationales for the governance changes they propose ex post and that articulation should be based on their assessment of the target’s governance profile ex ante. Creating such an ex ante profile would involve modest incremental costs while improving the quality of prosecutorial decisions on how to proceed with a case. Subsequent articulation of rationales would add systemic benefits by increasing rationality, building credibility, deflecting criticism and creating a catalogue of useful. I thus part with critics of prosecutors in the boardroom by explaining the value of prosecutorial investment in corporate governance.