Fight Corruption, because it is the right thing to do

Today, 9 December, marks the international anti-corruption day. As every year on international anti-corruption day, our e-mail boxes, newsletters and LinkedIn feeds are flooded with messages and stories about bribery and corruption. Although such wave of information on this topic creates the very much needed attention, we see it often hits the wrong tunes. The story typically being told is: ‘protect your reputation and therefore invest in your anti-corruption program’. Even the recent Swiss and US’ enforcement actions against Trafigura resulted in discussions on third party risk management, sufficient resources and ensuring effective anti-corruption compliance. Although we agree and absolutely also plead for such investments, the starting point of each discussion around corruption should be: fight corruption, simply because it is the right thing to do. For the record, this does not only apply to bribery and corruption, but to corporate crime in general.

The United Nations Convention against Corruption

On 31 October 2003, the General Assembly of the United Nations adopted the United Nations Convention against Corruption. To date, 190 countries committed to the convention’s anti bribery and corruption obligations. This shows the universal recognition of the corruption problem. The General Assembly also named 9 December as International Anti-Corruption Day. The primary objective of this day is to raise awareness on the enormous damage that is caused by corruption.

In every blog about bribery and corruption, we highlight their negative impact on societies and economies. Just follow the news and you will note that corruption is intertwined with crime, conflict and instability, it limits and destroys social and economic development. Moreover, corruption undermines democratic values and principles, as well as the rule of law. The website of the UN notes the following: “Corruption not only follows conflict, but is also frequently one of its root causes. It fuels conflict and inhibits peace processes by undermining the rule of law, worsening poverty, facilitating the illicit use of resources, and providing financing for armed conflict.”. Furthermore: “At its core is the notion that tackling this crime is the right and responsibility of everyone, and that only through cooperation and the involvement of each and every person and institution can we overcome the negative impact of this crime”. We completely agree with this description. The real problem of bribery and corruption is not the risk of penalties, fines or reputation, it is the damage caused by it.

We have seen first-hand how bribery and corruption impacts societal well-being, economic stability, and democratic principles. Beyond the risk of penalties, fines, and damaged reputations, we are of opinion that organisations have a responsibility to actively engage in the fight against corruption. It is not merely a legal obligation, it is a moral duty that is grounded in our belief that ethical conduct is the basis of sustainable success. Organisations that recognise and embrace this responsibility, not because of compliance but because it is the right thing to do, will overcome the challenges posed by corruption. Such organisation will also thrive and outlive any organisation who does not. So let’s focus on the real problem at hand and take a stand against corruption.

The need for intrinsic motivation to effectively fight corruption

Imagine eavesdropping on a conversation between an organisation and its external accountant. The organisation, a global company specialising in the development and sale of medical devices, is prompted by the accountant to conduct a Fraud Risk Assessment (FRA). Not an uncommon request of an external accountant. It seems that the organization will reluctantly comply with this request, driven not by an intrinsic motivation to combat fraud, bribery, and corruption but merely to meet the external accountant’s directive. What will happen? The FRA is likely to be a superficial exercise, with the organisation allocating only just enough resources solely to fulfill the accountant’s ask. We think that sustainable success in the fight against fraud, bribery, and corruption hinges on intrinsic motivation. If an organization lacks this internal drive, its efforts are bound to be insufficient. Moreover, recent enforcement developments such as the Monaco Memo, the UK Failure to Prevent legislation and the French updated Anti-Corruption Guidelines will make it even more difficult for organisations that only combat corruption because the law tells them to do so.

Only when organisations are intrinsically motivated to fight corruption, i.e., because it is the right thing to do, they will be able to effectively tackle corruption. We call this: effective compliance.

The before mentioned intrinsic motivation ‘to do right’ is a key element of effective compliance. This is reflected in the changing societal norms and values over time. As society evolves, so do the expectations from organisations, particularly in areas like ethical behaviour, social responsibility, and environmental care. These expectations are driven by values that are increasingly prioritized by both individuals and businesses. Research led by former Unilever CEO Paul Polman supports this, indicating a trend where employees, especially from younger generations, gravitate towards organisations that align with their personal values.

For organisations to genuinely fight corruption, they must foster this intrinsic motivation. It’s not just about avoiding negative consequences like damaged reputation, but more importantly about adhering to ethical principles. This shift towards intrinsic motivation necessitates the development of compliance programs that are not only legally sound but also deeply rooted in the company’s commitment to ethical standards. After all, when organisations are intrinsically motivated, they are more vigilant and resilient, which is crucial for effective compliance. This internal drive aligns them more closely with evolving societal values and norms. As a result, when new laws and regulations are introduced, organisations driven by intrinsic motivation often find it easier to adapt. They are likely already moving in step with societal changes and their own value systems. Therefore, instead of requiring significant overhauls to comply with new standards, these organisations can make smoother, more natural adjustments, staying aligned with both legal requirements and societal expectations.

Want to effectively fight corruption? It is key to understand how it works. A good starting point is reading our How They Do It blogs. We also suggest the following books:

If you are interested in the topic – and not just want to make your bookshelves look interesting – there are a few books we recommend to read. First of all, Net Positive: How Courageous Companies Thrive by Giving More Than They Take by Paul Polman and Andrew Winston. Polman and Winston are advocates for a new way of doing business. They argue that companies should not aim for being ‘neutral’ i.e., compensating their damages but should be net positive. Meaning, companies should contribute more to society and the environment than they take. They should focus on the long term and not just trying to make as much money as they can, but prioritize making the world a better place. In other words, focus on upholding your values by aligning your decision-making with your values and with that, not engage in corrupt practices. And indeed, invest in decent resources for your compliance function, increase ethical behaviour and transparency by stimulating just behaviour and decision-making based on your values.

Second, the Dictionary of Corruption by Robert Barrington, Elizabeth Dávid-Barret, Rebecca Dobson Phillips and Georgia Garrod. According the authors, the dictionary “establishes a common interpretation of the language and terminology in the field of corruption and anti-corruption studies“. By no means this book is an ordinary dictionary, only to open when searching for a specific term. As specialists ourselves, we highly recommend anyone dealing with anti-corruption to read it (in other words, everyone dealing with human beings who might want or need something, including themselves). The book paints a clear picture of for example what is considered an Anti-Bribery and Corruption (ABAC) Program, the role agents and intermediaries can play (including a case study), the what’s and the how’s of the OECD Anti-Corruption Convention and what a protected disclosure is.

Finally, we’d like to point you in the direction of How to Pay a Bribe, Thinking like a Criminal to Thwart Bribery Schemes by amongst others Richard Bistrong a former FCPA-violator. Edited by Alexandra Wrage and Severin Wirz, contributing authors Robert Appleton, Brian Baldrate, Anupama Chettri, Jeffrey Clark, Kathleen Hamman, Cindy Hong, Ken Silverstein, Amy Sommers and Tamou explain in details how bribes can be paid. As we noted in our earlier articles, we are big fans of addressing fraud and corruption by thinking as a fraudster and that is exactly what these authors did. Ranging from evading third party due diligence controls, to involvement of oligarchs and dictators, and the use if corporate charitable contributions. Their shared experience is written down to provide the readers with tools to proactively address corruption risks.

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