Corruption:. Corruption can be loosely defined as deviation from honest behaviour but it also implies dishonest dealing, self-serving bias, underhandedness, a lack of transparency, abuse of systems and procedures, exercising undue influence and unfairly attempting to influence. It refers to illegal or unethical practices which damage the fabric of society.
Bribery: The act of taking or receiving something with the intention of influencing the recipient in some way favorable to the party providing the bribe. In simple words, bribery is giving or receiving something of value to influence a transaction. Bribery is a form of corruption.
Examples of form of bribery
– Money
– Tangible gift
– Granting a privilege
– “facilitation payments” paid to foreign government officials in the course of routine business
Parties who may be held responsible:
– The payer
– The recipient
– Those who knew about the bribe but didn’t report it
– People with authority who don’t take actions to prevent bribery
Why bribery and corruption are problems
Lack of honesty
Those with authority and responsibility will not be acting impartially and violating a duty of service.
Conflict of interest
Their personal interest will conflict with their legitimate duties and responsibilities. Furthermore, if they are threatened with public exposure, they might take actions that are not in the best interest of the organization.
Economic issues
Misallocation of resources will occur. Contracts will go to those who paid the bribe rather than those who are the most efficient.
Professional reputation
It brings a bad name to the profession as a whole.
Measures to combat bribery
1. Top-level commitment. The board must foster a culture in which bribery is never acceptable and it is understood that the achievement of business objectives should never be at the expense of unethical and corrupt behaviour.
2. Proportionate procedures. Procedures should be implemented which are proportionate to the bribery risks faced by the organisation and its activities. These should also be transparent, practical, accessible, effectively implemented and enforced by management.
3. Risk assessment. A formal and documented audit of both the internal and external risks of bribery and corruption should be periodically undertaken. This should be incorporated into the organisation’s generic risk management procedures and reported upon annually to shareholders.
4. Due diligence procedures. Bribery risks can be mitigated by exercising due diligence. Any personnel operating in sensitive areas require greater vigilance; this includes all board members and any personnel involved in procurement and contract work.
5. Communication. Internal and external communications ensure that bribery prevention policies and associated procedures are embedded into the organisation’s culture and understood by everyone. Employees at all levels should undertake regularly anti-bribery compliance training so that they remain constantly aware of the risks.
6. Monitoring and review. Internal audit, tasked by the audit committee, should monitor and review bribery prevention procedures and recommend improvements where necessary
How can an anti-corruption culture be established?
– Set a zero tolerance policy and communicate the consequences that employees may face
– The senior manager should be involved in development and implementation of bribery prevention procedures
– Training: general training on threat of bribery at the time of induction as well as specific training to those involved in higher risk activities such as purchasing and contracting
– Do not send a conflicting message by focusing on short term profits
