Five Reasons You Need to Get a Grip on Corruption Risk

Posted by Amanda Nieweler

on August 6, 2015

And Five Really Bad Reasons Given to Totally Avoid the Topic Altogether

“A strong and visible tone at the top is the best support that Managers can offer to their sales teams who are working in countries ranked very poorly by Transparency International”

“When a company Director publicly declares his commitment to a zero tolerance for corruption he declares at the same time that the company’s turnover is based on the quality of the product or services and not on any illicit or corrupt business practice, which is what shareholders, employees and partners want to hear.”

Transparency International’s Corruption Perceptions Index ranks countries and territories based on how corrupt their public sector is perceived to be. A country or territory’s score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean). A country or territory’s rank indicates its position relative to the other countries and territories in the index.

The Index identifies clearly the countries most at risk in the annual survey on corruption. Public opinion indicates that corruption risk is considered an ordinary occurrence for every company currently doing business globally particularly in those countries rated poorly on the Index.

Corruption is a problem for all companies in all countries. To think otherwise is like saying the risk of a vehicular accident could never happen. Yet you take preventative measures by wearing a seatbelt at all times, right?

Many companies have a zero-tolerance for corruption, in theory anyway. Yet many CEOs avoid corruption prevention. You would never go without a seatbelt while in a car, would you? So why are CEOs avoiding addressing corruption in their companies?

Excuses, Excuses, Excuses!text excuses are the easy way out

The following article by Philippe Montigny, President, ETHIC Intelligence Certification Committee, covers five very bad “good reasons” that CEOs give not to communicate about corruption prevention. Each reason is followed up with a counter argument that should be used instead.

Very bad “good reason” #1: It is normal and expected that business will be conducted with integrity just as it is normal to obey laws, the CEO does not need to specify that the company does not pay bribes.

Very bad “good reason” #2:  If the CEO communicates on an anti-corruption compliance program, he is acknowledging that corruption is an issue in the company which is exactly the opposite impression he wants to give.

Very bad “good reason” #3: The risk of corruption is low for our activities and is a secondary concern for the CEO who does not need to address such a minor issue publicly.

Very bad “good reason” #4: The prevention of corruption is a legal issue and it is not the role of the CEO to comment upon it.

Very bad “good reason” #5: We can’t know the impact that banning corruption has on our turn over, but as it is probably limited, the CEO does not want to open that discussion.

Imagine this scenario. Your friend or family member gives you this very bad “good reason” for not wearing a seatbelt: “It’s too uncomfortable”. You’d probably declare them a few fries short of a happy meal.

Many argue the same could be said for management who avoids tough subjects like corruption, bribery, and whistleblowing hotlines.

Read the full article here then download the following eBook on beefing up your compliance program to help avoid corruption.

eBook: 10 Best Practices to Build a Strong Compliance Program