Tackling Corruption In Corporations

Corruption continues to take a dire effect on the global economy. It severely impacts the global economy and hinders socio-economic development by distorting economic relations. Those involved face public backlash, financial losses, and heavy burdens. The problem is significant at both corporate and governmental levels, affecting global trade and the democratic progress of emerging markets. Companies are increasingly scrutinized for their anti-corruption policies. This post will explore various examples of business corruption.

Bribes
When a business looks to win contracts, expedite processes or look the other way on any number of other activities, the company might look towards carrying out a bribe. Organizations might use their large access to financial resources to persuade local politicians and officials to authorize activity in a foreign market, a consultant might win public contracts through incentives, an executive might appoint a person that otherwise might not have been selected. Theses possibilities can go on. In light of public attention on scandals and cases as seen on media companies are urged to act with tougher anti-corruption measures. 

It is then when companies are able to improve their natural resilience to shocks and able to follow better sustainable path.

Conflicts of Interest
This issue arises where the concerns or aims between two different parties are incompatible. For example, an employee might compromise their duty to the company as they are also the director or shareholder of another organisation. Or perhaps an employee might award a contract to a company in which they take a financial interest in. Adhering to relevant guidelines such as ICC's could make a good starting point to building a more transparent company culture.

One where employees are taught to declare any conflicts of interests on registers or board members and key employees undergo regular screening.

Although security and exchange commissions have rules to protect investments from the effects of insider trading, incidents are often difficult to detect as investigations involve a lot of conjecture.

Antitrust laws
These are regulations monitoring the distribution of economic power in business to facilitate healthy competition and growth of economies. The laws apply to almost all industries and sectors inside every department and tier. Antitrust laws are statutes developed by the government to protect consumers from predatory business practices to ensure that fair competition exists in an open-market economy. 

Antitrust laws protect against price-fixing, bid-rigging, corporate mergers, and monopolistic activities, with companies facing greater penalties if their workers fail to comply.

Forged business transactions
This is an overarching example relating to the manipulation of financial data or other business documentation. Whether it is changing a few digits of financial data or gaining access to securities, bonds and contracts it can all fall liable with committing crime. If accused of forgery or any associated crimes the person might need a criminal defense lawyer to refute the charges. 

The punishment for embezzlement can be very severe for the relevant individuals and catastrophic for the business as a whole. It is always crucial to follow the law to avoid the consequences of jail time and fines!

"There is no compromise when it comes to corruption. You have to fight it." – A. K. Antony

— Trueblogposts (@trueblogposts) October 16, 2020

Corporate social responsibility
Many companies look to use strategies such as greenwashing or environmentally friendly language to push a positive public image when dive deep into the organizational activities such as the supply chain, you might notice that the business is not as ethical as they preach. It is hard for businesses to ever achieve complete transparency this as they are cultivated to make a profit at primary interest.

Greater scrutiny should be applied for government and institutions to take action towards leading tougher regulatory practices.

Partisanship
Many corporate executives use their company soapboxes to promote values unrelated to the business. These executives should be brought to consider carefully how their actions align with the attitude of consumers. Many businesses aim to profit from political dysfunctions and undermine the effective functioning of government. By being involved in such matters not only can it result in the loss of customer segments it could also perpetuate discriminatory beliefs and agendas. 

As a consumer consider what decisions you make. Does the business look to serve you with integrity or do they look to just profit from you as the consumer?

So... Your story to share?
This post aims to inspire thoughts on the various ways corruption can appear in business activities. As highlighted here, corruption can take many forms, including extortion, fraud, and embezzlement. If you have a personal experience to share, please feel free to add it in the comments below.



Resources
(Article) Who suffers and how much from corruption? Evidence from firm-level data
In this article, 164,000 companies from 144 countries are analyzed, over the period from 2005 to 2020. Authors Andrzej Cieślik and Łukasz Goczek investigate the determinants of corruption at the firm level.

(Paper) Public Sector Strategies in Curbing Corruption: A Review of the Literature
Corruption is widely recognized as a social plague that takes a turn in most countries worldwide. The ‘syndromes of corruption’ - term coiled by Johnston (2005), i.e. elite cartels, clans and oligarchs locate corruption scenarios in different contexts.

(Paper) Corporate Corruption: A review and an agenda for future research
Addressing corruption takes a concerted effort from companies, regulatory bodies, and international standards. By adhering to ethical practices and leveraging frameworks like ISO 37001, businesses can support in preventing corrupt practices worldwide.