Murillo Campello (Cornell), Daniel Ferrés  (Montevideo) and Gaizka Ormazabal  (IESE)  ‘Whistle-Blowers on the Board? The Role of Independent Directors in Cartel Prosecutions’ (2017) The Journal of Law and Economics 60(20 241

The goal of this paper – which can be found here – is to examine ‘whether market-based penalties for nonexecutive officials [more specifically, independent board members] in firms involved in price-fixing are significant in shaping their behaviours.’ The reason to focus on independent board members is that they ‘are highly sensitive to market sanctions (for example, in the form of reputational losses). Importantly, directors have powers not only to order internal investigations but also to require officers and employees to cooperate with prosecutors. In some cases, boards also establish special committees and appoint outside counsel to consider applications for leniency. As a result, they constitute a set of corporate insiders whom antitrust policies can exploit in designing prosecution policies.’ The paper is structured as follows: Second 2 begins by providing an overview of US and EU regimes for cartel prosecution and leniency. It also describes the role of corporate boards in cartel investigations. In the US: ‘Once the corporation learns…