At the anticorruption summit held in London last month, world leaders pledged to fight tax dodging, boost transparency and redouble efforts to confiscate and repatriate stolen assets to many of the world’s poorest countries.
While this push may deter politicians and high-ranking officials from attempting to stash ill-gotten gains abroad, it offers little guidance on another crucial front—international companies that continue to be hit up for bribes in territories where corruption is endemic.
John Bray, director of Singapore-based consultancy Control Risks and author of the firm’s International Business Attitudes to Corruption series, has some answers.
First, “You need to map out the different kinds of corruption, breaking it down by sector and the different stages of the business process,” he says. There’s a difference “between bribes to win a contract, which are clearly illegal, and so-called facilitation payments, or operational bribes to secure the smooth running of an existing business. In the first case, you can always walk away. In the second, the sums are usually much smaller but resistance is often more difficult.”
Bray points to a variety of practical “resistance strategies,” like defusing the tension when refusing to make a bribe by smiling and telling a joke. But he admits it’s “difficult for an individual company to solve the systemic problems that lead to these kinds of demands.”
Collective action, as when US chambers of commerce weigh in against corrupt processes, can help in some regions.
But a lot comes down to a company’s internal controls and corporate culture.
Fighting corruption “requires codes of behavior, training and a statement from the CEO that is more than symbolic,” says Bray. Appropriate controls must be in place, and they should cover private bribery, not just payments to officials. “Kickbacks to procurement officers happen almost anywhere in the world, including Western Europe. That’s not good for business by any measure,” he says.
Employee incentives should take into account the culture of a particular territory. And managers should avoid sending out “mixed messages,” which could be taken as coded approval of bribery, and not set unrealistic targets that “pressurize sales people to deliver, come what may,” Bray notes.
Says Adrian Furnham, professor of psychology at University College, London: “Overaggressive management not only pushes employees towards corrupt practices, it also gives rise to retributive action such as deliberate sabotage or whistle-blowing.”
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