Risk compartmentalization

Risk compartmentalization occurs when?

  • companies place their most problematic employees into separate profit centers so that they cannot influence one another to act unethically
  • all profit centers within a corporation are aware of the code of ethics.
  • all profit centers within an organization become aware of the consequences of competitors’ actions.
  • various profit centers within an organization become unaware of the consequences of their actions on the firm as a whole.
  • ethics and compliance programs reduce the risk of misconduct.

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