Independent reviews have become a familiar feature of modern corporate enforcement. Once largely confined to court-appointed special masters in public law litigation, monitors are now routinely imposed in corporate agreements with the Department of Justice, the Securities and Exchange Commission, and other government law enforcement authorities. Their goal is simple in theory: When misconduct is widespread or systemic, an independent outsider is appointed to oversee remediation efforts and report to government authorities. In practice, however, controls raise persistent questions about their effectiveness, legitimacy, and ability to generate lasting change within organizations.
In a future book chapter, I'll examine how modern controls work, why government actors rely on them, and what their growing use reveals about the relationship between compliance, corporate culture, and public trust. Rather than treating controls as a purely technical compliance tool, the chapter situates them within a broader effort to reform organizational behavior after serious wrongdoing.
One of the defining characteristics of controls is that they are imposed precisely when government authorities (and the public) are not convinced that a company can remedy misconduct on its own. Monitors are independent, private third parties, appointed after wrongdoing has been identified. Their task is not to prevent misconduct in the abstract, but to oversee corrective action – evaluating internal controls, compliance programs and governance structures – and to provide credible information to courts or law enforcement agencies about whether reform is actually underway. In this sense, observers function as external fixers, bridging the gap between public enforcement and private governance.
Much of the debate around the monitors has focused on their costs, opaque reporting practices, and the risk of cronyism in the selection of monitors. These concerns are well-founded. Audits can be extremely expensive, their reports are often hidden from the public, and the profession remains largely unregulated. Yet focusing exclusively on these criticisms risks obscuring a deeper question: what exactly are monitoringships supposed to accomplish?
An increasingly important response is cultural change. Many of the most damaging corporate scandals of the past two decades are not simply the result of isolated bad actors. They were embedded in organizational cultures that normalized rule-breaking, marginalized compliance functions, or prioritized performance at all costs. If the misconduct is cultural, the remedy must be more than procedural.
Some observers have explicitly taken up this challenge. Volkswagen’s “Dieselgate” surveillance program is a prominent example. There, the monitor's mandate extended beyond mere technical compliance to address the corporate culture that had enabled years of deception. Monitoring focused on governance reform, internal reporting structures, management accountability and the company's approach to transparency. Yet the limited empirical research indicates that although controls can reduce violations while the control is in place, these effects often fade after the control ends. This raises uncomfortable questions about whether controls generate lasting behavior change or just temporary improvements in compliance.
Monitor design is extremely important. Who is chosen as an observer, what expertise they bring, and how their mandate is structured all seem to determine the chances of success. Yet observer selection remains heavily skewed toward lawyers and former prosecutors, even in cases where the underlying failures involve engineering, finance, or organizational behavior. Legal expertise is often essential, but it may not be sufficient on its own to diagnose and remedy cultural dysfunction. Effective controls may require interdisciplinary teams combining legal knowledge with expertise in organizational culture, risk management and industry-specific operations.
Independent audits are neither a panacea nor a simple compliance formality. These are extraordinary interventions, deployed when trust in a company's internal governance collapses. Their future effectiveness will depend on the willingness of regulators, courts and academics to move beyond ad hoc experimentation towards clearer standards, expertise-based selection and meaningful measures of behavior change. Without such reforms, controls risk becoming costly symbols of accountability rather than lasting drivers of organizational reform.
Veronica Root Martinez is the Simpson Thacher & Bartlett Distinguished Professor of Law at Duke University Law School. This article is based on his chapter “Independent Monitorships”, forthcoming in the Cambridge Handbook on Organizational Culture and Misconduct and available here.
