Fighting Corruption: Good for Corporations

July 31, 2013
Categories: Anti-corruption

Transparency International’s (TI) Global Corruption Barometer 2013 reveals that more than one-quarter of survey respondents have paid a bribe within the last year, when transacting with key public institutions. The survey is based on responses from about 1,000 people in 107 countries. These numbers are particularly striking because they are the opinions of average people, not experts.

When respondents were asked whether corruption was “a very serious problem,” they responded on average with a score of 4.1 on a 5-point scale. The survey also disclosed that, in 40 countries, over 50% surveyed think the private sector is “corrupt” or “extremely corrupt.”

The worst levels of bribery were found to occur in public institutions, such as the police and judiciary, which were “entrusted to protect people.” These two elements of the public sector were also viewed as the most bribery-prone. Overall, political parties were perceived to be the greatest source of corruption. The survey revealed that over half of the respondents think corruption has increased in their countries over the last two years. However, 67% of respondents concurred with the idea that ordinary people can make a difference in fighting against corruption by not participating and reporting incidents. According to the survey, 54% of respondents said they would be willing to pay more to buy from a company that is “clean/corruption free.” This underscores what many have long argued: companies can expect to receive a benefit from operating with high ethical standards.

Due, in part, to this type of external demand, more and more countries are “upping their game:” signing on to international anti-corruption initiatives and conventions, adopting and implementing domestic anti-corruption laws, and assisting in other countries’ anti-corruption enforcement efforts.

In an InsideCounsel article this month, Robertson Park and Timothy P. Peterson highlighted that company compliance professionals and corporate counsels would do well to recognize and address the changing landscape of the corruption prevention. Rather than merely being concerned with FCPA compliance, companies must now ensure that their anticorruption policies are in accordance with the laws of any countries in which they do business. If countries are proactive and train their executives and employees in all units they will be in the ideal position to retain customers, gain a positive reputation, and will be preemptively prepared for any change in international anti-bribery enforcement.

CREATe’s Leading Practices for Anti-Corruption uses an “assess, evaluate, and improve” method to help companies enhance their existing management systems and prevent corruption.