Corruption has grown into a major global problem, impeding competition, skewing level playing fields and destroying innovation. For companies, bribery and corruption are incompatible with good governance and harmful to value creation, both at a macroeconomic level and at a micro level with individual businesses.
In Asia, where corruption is a major challenge, tackling corruption has assumed new vigor, driven by calls from business and civil society for governments to tackle it seriously.
Globally, governments in both advanced and emerging markets are stepping up efforts to combat corruption and moving rapidly toward proactive enforcement of anticorruption laws (not in the Philippines yet). Such efforts include updating and introducing new rules and legislation to combat.
New rules are evolving into more demanding standards for companies with stricter interpretations of corruption, right down to the operation levels. More stringent standards mean the definition of bribery is not restricted to just interactions with government officials, but also—rightly so—covers all manner of commercial bribery within the private sector.
Important is also for people and politicians to understand that rooting out corruption requires following the evidence no matter where it leads. It could also mean punishing friends and allies, since it is not confined to any sector of society.
Beyond a prudent regulatory framework and effective enforcement, public expectations are on the rise for companies to assume proactive roles in tackling and preventing corruption. Seen as the supply side of corruption, companies can clearly make a significant change by saying no to bribery. Movements, like the Integrity Initiative in the Philippines, urge companies to adopt clean business, sign the Integrity Pledge and take serious action against corruption.
For companies, particularly the boards that set policy and perform oversight, there are three things they and their boards must do:
- The board must recognize that clean business is a choice. It is a choice that companies can and must make to set a clear tone from the top about how the company is going to conduct its business.
- The board must be regularly updated on anticorruption policy and local regulations, as well as steps being undertaken to comply with requirements of the anticorruption policy. The company should regularly review the Code of Conduct along with procurement and supply chain policies.
- The board must be aware of the ever-increasing expectations by company stakeholders and investors for the company to have a clear stance on bribery and corruption.
In Asean disclosure of a company’s anticorruption policy and procedures is incorporated as criteria in the assessment of listed companies’ compliance with corporate governance standards, under the Asean corporate governance scorecard aimed at promoting Asean listed companies as an asset class.
Therefore, companies cannot be complacent about antibribery and anticorruption measures just because they think they themselves are clean. They do need to demonstrate to the public that they have in place anticorruption policies and adequate internal procedures backed by regular updating, monitoring and reporting.
The Integrity Initiative Inc. organized a Forum on Open Government Partnership (OGP) last week; here are the highlights of this forum:
- The OGP is a multilateral initiative that aims to secure concrete commitments from governments to promote transparency, empower citizens, fight corruption and harness new technologies to strengthen governance. It was formally launched on September 20, 2011, by eight countries (including the Philippines) and has now grown to 69 countries, as well as hundreds of civil-society organizations.
- OGP’s vision is that more governments become sustainably more transparent, more accountable and more responsive to their own citizens, with the ultimate goal of improving the quality of governance, as well as the quality of services that citizens receive.
- In the spirit of multistakeholder collaboration, OGP is overseen by a Steering Committee of governments and civil-society organizations. In the Philippines the OPG Steering Committee is chaired by Budget Secretary Florencio B. Abad; the Integrity Initiative Inc. is a member of the committee.
- The inclusion of the Integrity Initiative Program in the Third Country Action Plan of the Philippines to the OGP comes with a high price: The plan includes a commitment by the Integrity Initiative to get 10,000 signatories by 2017, and a commitment by government to establish a public-sector framework that will promote the II validation and certification system.
Have I convinced you that Integrity starts with I, meaning you? If you have not joined the Integrity Initiative Inc. yet and wish to sign the Integrity Pledge, contact Schumacher@eccp.com . Help us by reaching the 10,000 signatories fast.