A new survey conducted by the Conference Board focuses on anti-corruption and the role of ethical behavior. Interestingly,
Companies now, as in a similar 2000 survey by The Conference Board, seldom cite a bottom-line rationale for anti-corruption programs. Instead, they cite legal (e.g., General home country prohibitions were picked as the single most important factor by 27 percent of the participating companies while 7 percent accorded Sarbanes-Oxley Section 404 (2002) this designation) or ethical (bribery is wrong — 13 percent) considerations as justifications for investing in anti-corruption initiatives.
The most challenging country in terms of anti-corruption compliance?
More than 40% of the survey participants do business in China, Brazil, Mexico, and India, countries that are at high risk for corrupt practices in business. According to 36% of the companies active in China, that country poses “the greatest overall challenge to the company’s operations because of the level of corruption.”
And finally, an issue that is often considered the gray area of corruption – facilitation payments:
Facilitation payments (a fee paid to an individual who performs no necessary services) may be the most vexatious anti-corruption policy issue. However, in recent years, the trend has been for companies to become more restrictive in the policies that allow employees to make these payments. In 2000, 19% of the surveyed companies said that within the last three years their policy has become more restrictive. In 2006, 27 companies moved in this direction.
Speaking of facilitation payments and company-led anti-corruption intiatives – a useful tool to consider is Transparency International’s Business Principles for Countering Bribery. The Principles give companies a set of guidelines for developing an anti-corruption program, taking a tough stance on facilitation payments. Further, some follow up tools already developed [as well as new ones being developed] by TI help companies ensure that they not only put some anti-corruption mechanisms in place, but that those programs are actually implemented through all levels of an organization. It must also be noted that the Principles and supporting tools are applicable in large multinationals as well as in small and medium-sized companies.
Published Date: December 18, 2006