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Tuesday
Jun092015

Alison Taylor: Is this how corrupt companies talk?

Corrupt organizations expect employees to parrot one set of values, while at the same time understanding that the real priority is to subvert these values by paying bribes to win business, or looking the other way when issues arise. This mixed messaging creates a level of ambiguity, which you see clearly in the use of euphemism, code words and metaphors in many corruption cases.

At SNC Lavalin, bribes were coded as PCC, which stands for Project Consultancy Cost. Enron described the millions it spent in India in the 1990s as money to educate Indians.

The notorious FBI-driven Africa Sting operation collapsed at the trial stage, partly on the basis that participants never referred specifically to bribe payments -- the jury did not consider that talk of a 20% commission to the minister was sufficiently unambiguous.

The former CEO of PetroTiger, Joseph Sigelman, is making the case that email exchanges discussing how to characterize the Manila Split payments are so vague that they do not prove corruption.

In banking, it's common to refer to compliance training as "sheep dipping," which conveys an implicit disdain for the process, but also an understanding that all employees must go through it.  

Cultures of corruption need employees to navigate a world where the leadership is telling them to do one thing, while implicitly directing them to do something else. These signals are not difficult to follow, but require an initiation process that socializes the employee to accept corruption, and even regard it as a privilege to be included in the joke. It explains the use of metaphors to describe corruption, the prevalence of in-group culture in corrupt organizations, and the creation of mystique around corrupt teams, who deliberately limit the access available to more ethical outsiders.

Compliance processes make no sense in a vacuum. It's time to look carefully at who holds power, how decisions are made, who interrupts who, euphemism and body language. In seeking to identify corruption, look first at which teams are so high performing and highly regarded that they escape normal levels of scrutiny. This might be more useful than reviewing lists of which employees have undergone the annual sheep dip.

________

Alison Taylor is director of advisory services at BSR, a non-profit consultancy and company network focused on sustainability and CSR.

Reader Comments (7)

Another excellent piece via Alison Taylor, and my thanks to the FCPA Blog for exposing her important work to the wider compliance community. As I often share, from my career on the front-lines of international sales, the language of bribery and corruption utilizes many colorful and descriptive words, except one: bribery. As Ms. Taylor well states, the implications of this dynamic will "limit the access available to more ethical outsiders" with consequences both for the compliance suite as well as the Courtroom.
June 9, 2015 | Unregistered CommenterRichard Bistrong
There are many words, connotations, hidden words in all languages to hide bribery and corruption. It all breeds from the TOP which no one agrees and no one has guts to deny it. Having worked and lived in over eight 8 countries, I come across many words in English, Spanish and local Patwa (change the sequence of letters in a normal word that means one has to give bribe). In data analytic language, fuzzy is quite common. No one can detect the hidden words with different acronyms unless you know the culture, habits and environment surrounding. Finally I can conclude by saying "Hay que bajar la mula" in Spanish. "Let Sun shine on my bald head" in Nigerian way.
June 9, 2015 | Unregistered CommenterSubash Murray
Great post emphasizing the need for leadership to recognize the vital importance of "walking the talk." Without buy-in and modeling from all levels- CEOS to managers- culture erodes faster than any compliance & ethics training may seek to establish or correct.
June 9, 2015 | Unregistered CommenterEthical Systems
Ms Taylor hits the nail squarely on the head: No business entity of any size explicitly endorses corruption or any other form of non-compliance. The CEO and other senior executives will never be heard to speak ill of compliance. Rather, they depend upon the company culture to convey to lower tier executives and mid-level management that the real mission is to achieve the business objective with minimal cost or concern for compliance. This is where government regulatory agencies fail to understand corporate culture: Government demands strong statements from CEOs in favor of compliance, which CEOs will dutifully supply. The real question is whether the culture of mid-level management embraces compliance.
June 9, 2015 | Unregistered CommenterMichael Deal
Whether or not any business entity of any size explicitly condones corruption doesn't much matter if they continue to set goals and objectives for staff, particularly sales and/or business development staff, that can be achieved only with corruption or a huge amount of luck. And if they continue to penalise staff who don't achieve these these goals and objectives.

Any such mismatch makes it very clear what is expected- win at all costs.
June 10, 2015 | Unregistered CommenterLyn Boxall
"In a riddle whose answer is chess, what is the one word you must under no circumstances use?” -- J.L. Borges, The Garden of Forking Paths. Of course the answer to this question is "chess."
June 10, 2015 | Unregistered CommenterScott Killingsworth
When we believe the ends justify the means, we have sold our soul to the devil.
June 11, 2015 | Unregistered CommenterDouglas Dunn
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