Companies should set high standards on corruption and provide the support necessary for their people to follow them
The effects of corruption on society are well documented: politically it represents an obstacle to democracy and the rule of law; economically it depletes a country’s wealth, often diverting it to corrupt officials’ pockets; and, at its core, it puts an imbalance in the way that business is done enabling those who corrupt to win.
These effects may seem remote when a business needs to secure a contract. Some employees may even consider it harmless – the company gets its contract and the official gets his kickback; it’s just the way business is done in some parts of the world. However, corruption is not a victimless crime.
Bribery and corruption leads to decisions being made for the wrong reasons. Contracts are awarded because of kickbacks and not whether they are the best value for the community. Corruption costs – it costs people their freedom, health and human rights and in the worst cases, it costs lives.
Now it may even cost UK companies, as the Anti-Bribery Act takes force, making an organisation culpable if it fails to have “adequate procedures” in place to stop bribery and corruption from taking place.
As well as this significant pressure from law and civil society to address the issue within corporations, there are other reasons why companies need to ensure that they are proactive in fighting bribery and corruption. Business critical issues such as integrity and reputation risk management far outweigh any perceived benefits to participating in corruption. No company wants to have their reputation, which takes years to build, permanently tarred by their involvement in a bribery and corruption scandal.
The most commonly reported issue in the Institute of Business Ethics media monitoring service during 2013 was bribery, corruption and facilitation payments, with 139 stories (13% of the total) reported. The predominance of lapses in these areas applies to news reports for a range of sectors – including finance (6% of news stories), pharmaceutical companies (47%), extractive (70%), defence and security (63% of news stories), and broadcast/media (33%).
Such news reports indicate that businesses have some way to go in effectively embedding anti-bribery and corruption mechanisms into their culture to ensure long term behaviour change.
Such change does not happen over night. It would be naive to think that simply drafting a policy and emailing it to staff can genuinely change the way business is done.
Corruption can be so ingrained into a company’s culture as to be considered “the way business is done around here”. This can be the case especially for companies who use agents, or who operate in countries where enforcement of anti-corruption regulation is poor and facilitation payments are seen as the norm for doing business.
Getting staff to see that a “backhander” is actually a form of corruption, will take time, and requires regular communication and training. Equally, closer to home the line between genuine hospitality and undue influence on a business decision can often be blurred.
The corruption challenge
Most companies offer employees some sort of guidance on anti-bribery and corruption. However, the global nature of today’s business means that organisations can have difficulties when trying to embed anti-bribery and corruption policies around the globe – different countries and cultures may have different interpretations of what is considered ethical when it comes to bribery and corruption.
And even when guidance has been properly communicated, often these procedures are handed out in paper or held on shared drives to be accessed when needed via computer.
Research has shown that simply publishing a policy or a code of ethics is not enough to ensure that the values of HQ are communicated effectively and meaningfully to staff. The situation might be fine in the office or a training environment but what about when in the heat of the moment, when facing a supposed fine in a customs hall or an offer of a ticket to the hottest gig in town?
Mao Tse Tung said “food before ethics” – in other words, survival takes precedence over other moral considerations. Whilst no one would argue that bribery and corruption are a good thing, if you believe your job, is dependent on you offering or paying a bribe, the corruption policy sent round by head office may have little bearing on your decision in the moment.
Employers need to provide relevant support to staff to help them recognise, understand and respond to the ethical challenges they may face. In the IBE’s 2012 Ethics at Work Survey around a fifth of employees (20%) said they were aware of conduct they thought violated the law or their organisation’s ethical standards, but only just over half of those reported it to a manager.
The challenge to companies is to embed ethical principles in order to encourage an anti-corruption mindset throughout the organisation. Creating a culture that influences employees’ actions, decision making and behaviour can be a challenging and lengthy process, requiring sensitivity, patience and resources.
An ethics programme requires various components including, for example, awareness of the issues and training in handling them, a communications strategy and a speak-up procedure. With the advent of smartphones and handheld devices, there are new ways to support staff.
Difficult decisions for employees often arise in everyday situations, when travelling, when offering or accepting gifts and hospitality or when negotiating with customers or suppliers. There is always a delicate balance to be had between engaging training on ethical and compliance issues, and encouraging employees to apply policies in real-life situations. How easy is it to refer to a company policy when in a meeting with a potential customer?
Anyone, in any organisation, at any level can offer or be offered a bribe. Sometimes people may offer or receive something in good faith without realising that there is something more sinister behind it. For example, offering or accepting a gifts or hospitality is a particular grey area and there can be confusion around what is acceptable. Being clear about what can and can’t be accepted is good business practice and reduces the risk of corruption.
Help to say no
The IBE has developed a free app, the Say No toolkit, which provides the practical guidance needed to help recognise a difficult situation and which gives clear guidance about what to do in response. The toolkit has been designed to give employees the confidence to make the right decision in situations which could lead to accusations of bribery by explaining why that particular decision needs to be made.
Even with the support of a decision-making tool, it is one thing to know the “right” decision to make, but often another to be able to apply that decision.
Factors such as fear, ignorance, and real or perceived pressure to meet business targets, or pressure from a more senior figure, can all render individuals or groups incapable of putting ethical decision-making into effect. The obvious becomes so much less obvious when in the moment.
Visible support from leadership is critical in this instance – the impact of leading by example should not be underestimated. If senior management declare a zero-tolerance approach to bribery and corruption, they must demonstrate that they will support staff if they lose contracts or business in the short-term as a result.
Equally, role playing and working through scenarios to practice in-the-moment behaviour will heighten sensitivity to doing the wrong thing when under pressure.
Creating a culture of integrity and openness – where ethical dilemmas arising from doing business in corruption hotspots are discussed, and employees feel supported to do the right thing – is a powerful way to help mitigate against the risk of an ethical lapse.
The culture of an organisation is ultimately set by the tone at the top, whether that be senior management, or branch managers, or team leaders. Leaders who regularly talk about ethical issues, support staff to uphold ethical standards, and behave in an open and transparent way, send the message to all employees, and to the wider world, that the fight against corruption is taken seriously.
Harriet Kemp is head of engagement at the Institute of Business Ethics.
About the Say No Toolkit: For employees this toolkit helps them to know how to identify a bribe and what to do when confronted with a challenging situation. Users tap though a series of questions based on the circumstances being faced and the Say No Toolkit will give a practical answer: “Say No”, “Say Yes” or just as importantly “Ask for more information before making the wrong decision”. The toolkit targets common risk areas including when to accept a gift, when not to offer hospitality, what to say to avoid a facilitation payment and what to do if faced with a conflict of interest. Employees can get the exact guidance they need because the Say No Toolkit can be tailored to reflect unique company policies and guidelines.bribery corruption employees ethical business Ethics
May 2014, London, UK
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