Corruption has a high price. Globally, corruption has been estimated to total to 2% of the global economic output, which is around $1.5 – 2 trillion. How is it so rampant? Bribery and unethical behaviour can be contagious- “competitors that offer better products lose out in an unfair marketplace and this triggers a race to the bottom..." This is already happening in some regions, with Amazon employees allegedly leaking data for bribes, Novartis embroiled in controversy over bribing Chinese healthcare professionals to boost sales in 2016, and the Danske Bank found to have laundered over $234 billion between 2007 to 2015.
Just having anti-corruption laws might not be enough.
Canada signed the OECD convention to stop white-collar crime more than two decades ago. However, a new report suggests that Canada is losing ground in the battle against corruption, with active enforcement of foreign bribery laws declining. “Canada is at the ‘back of the pack’ of OECD countries when it comes to clamping down on the bribing of officials abroad,” with only four foreign bribery cases being initiated and one concluded in three years.
Though law enforcement and policy makers play a big role, there are things businesses can do to take a stand against corruption. There needs to be focus from the inside out; corporate boards and top management must focus on aligning strategy, embedding a culture of compliance, and providing consistent processes on monitoring and reporting unethical behaviour. Mac Van Wielingen, founder of Viewpoint and Canadian philanthropist, has advocated that corporate boards should take a more active role. “As leaders who oversee the most important decisions in an organization, directors have an unshakeable and implicit responsibility to ensure management pursues a path of ethics and legitimacy, through embedding a culture of compliance and ethics, and “ethical performance” through culture, strategy and accountability systems.” Directors cannot afford to be bystanders; instead, they must be actively responsible for the outcomes.
Author
Viewpoint Research Team