Regulation is relevant for both firms and individuals. Firms’ compliance with regulation is important, because firms’ non-compliance can negatively affect firms themselves (e.g., fines), individuals, and society at large (e.g., pollution). However, even if firms fully comply with regulations, the objectives of the regulation may not necessarily be reached if the regulation induces certain psychological processes in and behaviors of individuals and firms’ decision makers that work in the opposite or an otherwise different direction. This dissertation addresses two research questions regarding these issues: “What drives firms’ compliance?” and “What are the intended and unintended effects of specific regulations?”. In Chapter two, I address the first research question and find that employees’ perceptions of tone at the top are negatively associated with the risk that the organization will not comply with applicable laws and regulations, as assessed by employees. This effect runs through employees’ perceptions of the strength of two organizational practices: internal enforcement and error management. In addition, I find that employees’ perceptions about these two organizational practices are positively interrelated, indicating that these practices can go hand in hand from the point of view of employees. Chapter three aims to shed light on the second research question and demonstrates that mandatory disclosure of a conflict of interest (commissions) can reduce misselling of the product for which the disclosure is required. However, the results also indicate that firms may shift their focus towards selling products for which disclosure of commissions is not required. Finally, Chapter four also focuses on the second research question and investigates the effects of differences in potential conflict of interest disclosure regulations. The results indicate that a conflict of interest disclosure with a high readability in an analyst report can increase the probability that the analyst’s recommendation is discounted by unsophisticated investors, through decreasing the perceived trustworthiness of the analyst and increasing the perceived importance of the disclosure. In addition, I show that a conflict of interest disclosure with a low readability combined with other policy tools is not associated with a higher probability of discounting. A low readability conflict of interest disclosure combined with an upfront reference to the disclosure on the front page of the analyst’s report may even indirectly decrease the probability of discounting. Overall, the results of this dissertation highlight the importance of (i) considering an organization’s compliance culture (as perceived by employees) when managing compliance risks and supervising organizations, and (ii) evaluating the effects of both existing and new regulations and taking into account the behaviors and perspectives of all players in the industry in these evaluations.