Tackling Corruption In Corporations

Corruption continues to take a dire effect on the global economy. It has long been perceived as a major obstacle for socio-economic development; distorting national and international economic relations. Those who participate not only fall risk to public relation nightmares but are culpable for serious financial losses and heavy burdens. The scale of the problem is significant at both corporate and governmental levels and can affect both global trade as well as the democratic development of emerging markets. Now more than ever companies are coming under fire on their anti-corruption policies and measures integrated. This post will look more in detail of these different archetypal examples relating to business corruption. 

When a business looks to win contracts, expedite processes or look the other way on any number of other activities, the company might look towards carrying out a bribe. Organisations might use their large access to financial resources to persuade local politicians and officials to authorise activity in a foreign market, a consultant might win public contracts through incentives, an executive might appoint a person that otherwise might not have been selected. Theses possibilities can go on. In light of public attention on scandals and cases as seen on media companies are urged to act with tougher anti-corruption measures. It is then when companies are able to improve their natural resilience to shocks and able to follow better sustainable path.

Conflicts of Interest
This issue arises where the concerns or aims between two different parties are incompatible. For example, an employee might compromise their duty to the company as they are also the director or shareholder of another organisation. Or perhaps an employee might award a contract to a company in which they take a financial interest in. Adhering to relevant guidelines such as ICC's could make a good starting point to building a more transparent company culture where employees are taught to declare any conflicts of interests on registers or board members and key employees undergo regular screening.

Insider Trading 
This involves the buying or selling of a publicly-traded company's stock by someone who has non-public, material information regarding the stock. Insider trading can discourage ordinary people from participating in markets knowing the lack of access to nonpublic information. On the flip side, insider trading activity can be viewed as ethical where barring the practice may only exacerbate the income divide between those who have access to more resources. The rules and laws can vary between states and nations. Although security and exchange commissions have rules to protect investments from the effects of insider trading, incidents are often difficult to detect as investigations involve a lot of conjecture.

Antitrust laws
These are regulations monitoring the distribution of economic power in business to facilitate healthy competition and growth of economies. The laws apply to almost all industries and sectors inside every department and tier. Antitrust laws are statutes developed by the government to protect consumers from predatory business practices to ensure that fair competition exists in an open-market economy. Common examples of protections offered from antitrust laws include evasion of price-fixing, bid-rigging, corporate mergers, exploitative monopolistic activities. Companies fall higher risk to penalties than ever before if its workers fail to comply.

Forged business transactions
This is an overarching example relating to the manipulation of financial data or other business documentation. Whether it is changing a few digits of financial data or gaining access to securities, bonds and contracts it can all fall liable with committing crime. If accused of forgery or any associated crimes the person might need a criminal defence lawyer to refute the charges. The punishment for embezzlement can be very severe for the relevant individuals and catastrophic for the business as a whole. It is always crucial to follow the law to avoid the consequences of jail time and fines.

Corporate social responsibility 
Many companies look to use strategies such as greenwashing or environmentally friendly language to push a positive public image when dive deep into the organisational activities such as the supply chain, you might notice that the business is not as ethical as they preach. It is hard for businesses to ever achieve complete transparency this as they are cultivated to make a profit at primary interest but greater scrutiny should be applied for government and institutions to take action towards leading tougher regulatory practices. 

Many corporate executives use their company soapboxes to promote values unrelated to the business. These executives should be brought to consider carefully how their actions align with the attitude of consumers. Many businesses aim to profit from political dysfunctions and undermine the effective functioning of government. By being involved in such matters not only can it result in the loss of customer segments it could also perpetuate discriminatory beliefs and agendas. As a consumer consider what decisions you make. Does the business look to serve you with integrity or do they look to just profit from you as the consumer?

This post has been curated to spark ideas about how corruption can manifest in business activites. As we can see from this post corruption can wear many faces, from extortion to fraud and embezzlement. If you have a personal story to share please do so in the comment section below.

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Cedric Noronha said...

Nice to know about the corruption that takes place in the corporate world. Corruption can hamper the development in the corporate world. Corruption not only takes place in the corporate world, but also in the entire world.

Bill said...

I honestly don't think there's any corporation out there that isn't corrupt in one way or another. Corporations combine two things that always corrupt human beings - money and power.

Matt said...

Unfortunately, corruption has been around for ages. We need more good moral leaders that will root out corruption in their companies, and lead by example.

Aliceee Traveler said...

Wow wow wow. Such a good article. Coming from a post communist country I know first hand what corruption means. The bribing sistem is working until today, you can hardly have a surgery done without it, or any umergency paperwork done by public sector. It's crazy!!!

Emily Fata said...

Unfortunately, there is a lot of corruption in many companies around the world. I try to steer clear of the ones I know are particularly corrupt; I hate supporting businesses that don't work towards the betterment of the community.

Gervin Khan said...

Corruption not only exist in a Goverment but also in many companies all over the world and sometimes you really don't that the company that you trusted for is also doing this crime.

Marie at Complete Literature said...

Corruption is so widespread in corporations, government, and pretty much all world organizations. It is pretty discouraging because I feel that it is so prevalent that there is no stopping it anymore.

emman damian said...

Corporate social responsibility is a common tactic of corporations to lower their taxes. Also, they usually form foundations so they will have lower taxes. I think it's good that at least it goes to needy.

Ann said...

This is not a subject or an issue that I usually read about - which makes is so much better, thank you for the education!