According to IMF (International Monetary Funds) estimates released in 2016, corruption accounted to about 2% of the entire global economic output, which was approximately between $1.5 to $2 trillion! It is noticed that developing countries like India reported paying a bribe by 7 out of 10 citizens for getting access to various basic public services like public hospitals or clinics, public schools, to access utilities and official documents, etc. This has also been confirmed by the industry experts. Although, several laws against bribery and corruption have been introduced including an increase in enforcing such laws. The truth is that bribery and corruption, in particular, tend to thrive fully. This in turn, only has been causing businesses to witness increased costs, thereby creating price escalation to be faced by the society at large.
Fighting bribery and corruption
Having introduced laws merely will not help to curb this growing menace. The experts are of the strong belief that anti-bribery and anti-corruption efforts do require more traction, especially from the private segment. Businesses are expected to play a significant role in supporting responsible practices about every aspect surrounding their operations. For example, those who are embroiled with bribery scandals are likely to face several consequences, which also include steep legal and financial costs, business disruption and harm caused to their reputation and brand.
How companies tackle corruption and bribery?
Usually, organizations manage corruption and bribery risks by mixing internal processes, good basic practices, and certification requirements, across their operations. It also includes maintaining with vendors and suppliers. Even external standards can be made a powerful tool for supporting such efforts, to strengthen compliance practices and ethics by providing a clear framework to enable proper action. For external tools, one such example is ISO 37001 Anti-Bribery Mgt. Systems Std. that was published in 2016 by Intl. Organization for Standardization. It was designed by a committee of stakeholders including global business leaders. This standard does provide the organization with a clear structure to establish or benchmark effective and sound anti-bribery program that is aligned with its own risk profile, as well as to develop a culture to value ethical behavior. The program is outlined to withstand alone or to get integrated within the existing management system of the organization, offer a common approach and language to stretch across industries and borders. Bribery is also covered in all forms, be it indirect or direct, outbound inbound. However, cartels, frauds are not addressed along with money laundering, competition/anti-trust offenses, including other activities associated with corrupt practices.
Ways by which companies can strengthen good practices
Embedding compliance culture: Preventative aspects of the standard are likely to support organizational effort to develop a culture to value compliance and ethics within its operations. Standard needs training and communication apart from leadership role needs to bolster compliance programs as well as to continue growth for ensuring ongoing programs and also respond properly to changing risks.
Defining roles clearly for top management and the board: Standard does focus upon leadership roles and places it as central to the effective and efficient anti-corruption system. Top management and board responsibilities are stated very clearly. It also aligned and ensured the anti-bribery policy and the organization’s strategy. Compliance functions are to be staffed by people having the right type of skill set, authority, position, resources and independence to take decisions. With the right resources and clearly defined roles, it is quite obvious for anti-corruption and anti-bribery policies to achieve sure success. According to studies, the more engaged the leadership team and the board will be, the more will be the belief that corruption and the anti-bribery task will reduce or remain in a similar manner in the coming year.
Support consistent approach: Often, the Chief Compliance Officers have to monitor the different aspects of the business in over one location, thus making a consistent approach to be critical. Self-disclosure, remediation, and cooperation ensure less penalty and fines. The uniform framework is provided by the standard with trackable and measurable indicators to promote organization-wide consistency. Intentionally, the standard does not prefer one country’s regulatory architecture or legal regime over the other. Rather, a set of practices can be outlined and used by organizations, irrespective of where its operations are based at.
Using supply chain to cascade good practices: Besides having workers and subsidiaries spread across the globe, organizations these days are noticed to have complex 3rd party partners to support their business. It automatically carries some risks and benefits, with a business partner offering bribery being one among them. Besides third party auditing, monitoring, and due diligence, the organization may use the standard as a tool for measuring the third-party compliance program’s strength and abilities. It is possible by seeking 3rd parties to effectively demonstrate standard compliance or to rely upon certification.
The standard can be termed to be a global tool, which has been created by expert global stakeholder groups, something not tied with the guidance of any specific law or country. Thus, it is accepted readily as anti-bribery common language. This way, organizations can follow standard Anti Bribery And Corruption Policy.