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  • Writer's pictureAlison Taylor

A Zero-Tolerance Policy Can Only Go So Far


The anti-corruption enforcement boom took off first in the United States, then globally. In mere decades, a remarkable international consensus emerged. The zeal for enforcement continues today and comes with copious advice from regulators on how to design a good anti-corruption program. A decent one can even serve as both operational and legal defense in the event a bad-apple employee is caught paying a bribe.

 

Your company almost certainly has a zero-tolerance anti-corruption policy. It’s likely that your international business partners are familiar with the US Foreign Corrupt Practices Act and similar internationally binding laws, and know they must sign agreements promising not to pay bribes if they wish to secure your business. Corporate anti-corruption programs have thus reached the kind of advanced state that climate change activists dream of. Yet corporate bribery scandals continue, and corruption as a societal challenge remains unresolved.

 

While compliance efforts against bribery are essential, they are insufficient to tackle the wider challenges of corruption. You need to consider whether your company’s goals and targets incentivize employees to operate unethically. Are internal reward systems addressed in your compliance framework? As for bribery, zero tolerance won’t help much in countries where corruption is so endemic that your staff cannot function without facing extortion or physical threats.

 

Ruling out payments and favors won’t reliably address nepotism, regulatory capture, and rising pressure over lobbying and campaign finance. Moreover, doing business in a kleptocracy doesn’t necessarily mean bribing the power brokers who control lucrative relationships; working with them is a condition of entering the market. In such a market, winning a contract guarantees nothing: shifting political winds can topple kleptocrats and lead to retaliation, even expropriation. So, if you ban bribes but don’t consider wider questions of power and political risk, it can all end very badly.

 

Tackling corruption risk effectively in a given country requires more than legal controls. It starts with gaining a practical understanding of how corruption affects your sector. Then you must build business and political relationships to make your company resilient in the face of ever-unpredictable dynamics. You’ll need to cultivate an organizational culture with incentives and rules that do not conflict, and your employees must be empowered and trusted to raise questions and use their judgment.



Author and Clinical Associate Professor, NYU Stern School of Business, and Executive Director, Ethical Systems

1 comentário


Membro desconhecido
27 de mar.

@alisontaylor, you hit the nail on the head! It’s important to take into account all the issues enumerated in your article in order to effectively tackle corruption. This will include identifying the country’s corruption risk profile . It is imperative therefore to conduct an anti-corruption risk assessment as one of the primary steps towards developing policies to stem the tide against corruption.

Curtir

!

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