Voluntary compliance
Encyclopedia
Voluntary compliance is one of possible ways of practicing corporate social responsibility
.
Voluntary compliance is seen as an alternative to the state-imposed regulations on company's behavior. Proponents of voluntary compliance argue that it is in company's own interest to behave socially responsibly and that in pursuit of good public image, company will withdraw from doing actions, which could damage its perception by public. Thus there is no need for state regulations.
On the other hand, opponents deem that companies may claim to voluntary adhere to self-imposed regulations but in practice they often follow profit maximizing behavior often violating stakeholders' interests. However, such behavior may be problematic not only morally or ethically but also legally: corporate codes of conduct may give rise to legal obligations pursuant to national laws of European Union
member states implementing the Unfair Commercial Practices Directive or pursuant to consumer protection laws in other jurisdictions, including (subject to the effect of the Federal and State constitutions) the States of the United States of America.
In the United States, voluntary compliance may also refer to an argument made by tax protesters
, who suggest that payment of income tax
is voluntary, and not legally enforcable. However, this argument is rejected by the Internal Revenue Service
, and has not been accepted by the U.S. courts.
Corporate social responsibility
Corporate social responsibility is a form of corporate self-regulation integrated into a business model...
.
Voluntary compliance is seen as an alternative to the state-imposed regulations on company's behavior. Proponents of voluntary compliance argue that it is in company's own interest to behave socially responsibly and that in pursuit of good public image, company will withdraw from doing actions, which could damage its perception by public. Thus there is no need for state regulations.
On the other hand, opponents deem that companies may claim to voluntary adhere to self-imposed regulations but in practice they often follow profit maximizing behavior often violating stakeholders' interests. However, such behavior may be problematic not only morally or ethically but also legally: corporate codes of conduct may give rise to legal obligations pursuant to national laws of European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
member states implementing the Unfair Commercial Practices Directive or pursuant to consumer protection laws in other jurisdictions, including (subject to the effect of the Federal and State constitutions) the States of the United States of America.
In the United States, voluntary compliance may also refer to an argument made by tax protesters
Tax protester (United States)
A tax protester is someone who refuses to pay a tax on constitutional or legal grounds, typically because he or she believes that the tax laws are unconstitutional or otherwise invalid...
, who suggest that payment of income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
is voluntary, and not legally enforcable. However, this argument is rejected by the Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
, and has not been accepted by the U.S. courts.