International - Written by on Monday, December 9, 2013 15:38 - 0 Comments

Incentivise companies NOT to bribe.

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CarrotLast week we attended the Transparency International launch of the TI Corruption Perceptions Index.  Many others have covered the latest corruption chart and the movers up and down.

We were struck at the meeting by the focus on the enforcement angle to deter companies from bribing or more accurately to incentivise them to put in place anti-bribery controls.

Companies facing the ‘stick’ of enforcement will be incentivised to take steps to prevent bribery, or so the argument goes.

Some may.

One speaker (the evening was conducted under Chatham House Rule) commented, in the context of preventing employees from bribery, that an incentive was worth many policies.  The point being that a policy preventing bribery was ineffective if the management was only interested in revenue results.

Put another way if the employee logic is, ‘If I bribe I might get caught, If I get caught I might get fired, but if I miss my quarterly sales targets I WILL get fired’ then the bribe will win every time.

Let’s not kid ourselves.  Many businesses punish failure to meet financial targets with the sack.

Opinion

Too much  emphasis is placed on the ‘stick’ as the only incentive not to bribe.

Companies need to be incentivised not to bribe with the prospect of selling more, if they don’t or do their best to prevent it.

How?  Procurement processes should be tightened.  Governments and Aid programs can play their part in this.  In addition to legislating for companies to put in place robust compliance programs procurement processes should undertake more in depth due diligence on vendor compliance programs.  Aid programs could insist that recipients carry out compliance due diligence on their vendors.

Due diligence should be more than simply requiring vendors to confirm they have a code of conduct or an anti bribery policy.  Instead a few targeted questions could easily reveal whether the policy is a paper policy or an embedded program of substance.

Smoking out a paper policy isn’t hard.

In many cases simply asking the vendor to evidence steps its own policy sets out as being necessary (for example, training, risk assessment and due diligence) can produce a deafening silence with companies failing to live up to the standards they set themselves, irrespective of whether those standards are themselves up to scratch.

If properly implemented anti-bribery policies are a pre-requisite to making the sale you can bet your bottom dollar compliance will increase.

 

 

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