BRIBERY
BRIBERY
BRIBERY
The introduction of the Bribery Act (2010) has been a strong step towards combatting unethical
financial action in businesses. It has helped discourage criminal behaviour and raise people’s
awareness about corporate bribery, so that it can be more readily identified, reported, and
properly prosecuted.
Combatting unethical practices such as bribery is a matter of changing the way people
think. Considering bribery to simply be ‘a necessary evil’ or ‘the way business is done’ are
attitudes that become deeply ingrained in people and are difficult to purge. This is the toll
corruption and bribery takes on a business: it pollutes people’s perception of business practices.
Unethical practices can become the norm.
In 2016, the Institute of Business Ethics (IBE) identified the most commonly reported
business ethics issues as bribery, corruption, fraud and money laundering. These acts applied
to a range of business sectors, with unethical behaviour being most frequently recorded from
the finance, retail and technology sectors.
It can be difficult to quantify the damage bribery has on a company, particularly when it
actually accelerates the growth of a business, albeit by shady practices. But research carried
out by P.M. Healy and G. Serafeim from Harvard Business School offers an insight into the
impact of corporate bribery on organisations as a whole.
Impacts on firms’ reputation and on their financial standing (when they are faced with legal
costs) depends on whether or not the company’s illicit acts are ever brought to light. And the
fact is: many instances will fail to ever be reported.
Healy and Serafeim’s research instead focused on the impact on corporate performance. They
discovered that bribery’s most significant impact is its negative effect on employee morale.
Respondents of their survey were asked how they believed the detection of bribery would
impact their firm, and how it had done when discovered. Those whose company had genuinely
encountered bribery reported that it was employee morale that was most affected than any other
factor, even above reputation, relations with regulators, and financial standing.
If a company engages in bribery and corrupt business practices, they are endorsing it; they are
suggesting it is positive.
This “sends a strong message about what the organisation stands for”, as Serafeim stated. They
are perpetuating the idea that bribery is a fair business practice. It says to employees that
everything can be solved with money or incentives, rather than through hard work and building
relationships.
How can Corruption and Bribery be Prevented?
The Ministry of Justice has published 6 principles which companies should follow to prevent
and deal with bribery and corruption:
1. Proportionate Procedures
Procedures for preventing bribery should be in place which are proportionate to the size of the
company. This includes an anti-bribery policy, anti-bribery training for staff, and anti-bribery
rules by which people must abide.
A whistleblowing helpline – this should be available to all employees and they should
be encouraged to use it if need be.
Receipts being demanded for all payments made.
Not accepting cash payments.
Pooling gifts.
Staff, agents, and contractors being given training on anti-bribery measures and
procedures.
All procedures should be clear, practical, accessible, and effectively implemented and enforced
throughout the company.
Senior members’ attitudes will rub off onto those lower down the corporate ladder. They
represent the company, and need to show that it has a zero-tolerance approach to bribery and
corruption so that employees also adopt this perception and are less susceptible to unethical
practices.
3. Risk Assessment
Your company should be able to determine what specific risks of bribery it may be faced with.
Remember, if a member of the business is the one receiving a bribe they are equally
accountable. Are there any employees at particular risk of being bribed? Are they aware of
what to do if offered a bribe? Can they differentiate between a bribe and a goodwill gesture?
The Say No Toolkit is an app designed to aid employees with making difficult decisions
regarding bribery. It helps them understand the situation they’re in better and offers them
advice on how to respond.
4. Due Diligence
What industry is your company a part of? Finances? Manufacturing? Media? Depending on
what work activities people engage in as part of their trade or profession, different risks of
bribery could exist. Seniors need to undertake research to discover what these are and respond
appropriately.
5. Communication
The foundation of a company with strong ethics is its ability to communicate its anti-corruption
agenda openly and transparently to people. Employees should feel confident in their ability to
prevent bribery and should know that senior management will support them if they lose
contracts or business as a result of opposing corrupt practices.
This will all help communicate to employees that the company takes anti-corruption procedures
seriously and isn’t simply aiming to tick the compliance box.
Putting in place procedures without checking to see whether they are actually being adopted or
even working in practice is like putting up a smoke alarm without checking that its battery is
attached and that it actually emits sound. They need to be regularly reviewed to ensure that
they’re effective and that employees still have a strong understanding at all times.
Reinforcing policies on a regular basis will help them become deeply ingrained in employees’
minds. They will become an integral part of the company’s culture, which will eliminate the
possibility of an ethical lapse.
The fact of the matter is, companies need to fight this issue from the inside out. Many
companies worldwide are actively taking steps to address bribery, but it is still a global issue.
If corrupt attitudes are not addressed more proactively, they will continue to burrow deeper
into people’s minds and continue to negatively influence others, leaving the business with
nothing to show except demoralised employees and greed-driven relationships.