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Tuesday
May232017

Why do national anti-corruption strategies matter to companies?

A national anti-corruption strategy is a statement by the government highlighting proposed measures to mitigate the risk of corruption and a commitment by that government to dedicate resources to those measures.

These can include anti-bribery legislation, procurement rules, judicial reform, or any other governmental measure intended to reduce the incidence of corruption in a country. 

A strategy can be an important step for a government in identifying their specific corruption risks, establishing measurable goals to prevent corruption, and planning needed steps to achieve these goals.

Why is this important to corporations? National anti-corruption strategies can be a point of reflection on a number of fronts for companies, such as:

  • Are governments doing enough to prevent corruption and promote fair business environments?
  • Do they understand the systemic shortcomings that hamper the compliance work undertaken by companies?
  • Are countries' strategies sufficiently ambitious? Are they coherent?

However sound a company's regulatory compliance program may be, long-term success can only come in an environment in which the root causes risks are identified and addressed. As only governments can address some of those risks, companies should press for action by host governments. Collective action plays a role in this dynamic as well.

In collaboration with Dr. Mark Pyman, we have reviewed the procedural and substantive provisions of the national anti-corruption strategies in 41 countries ranking between 21 and 130 on Transparency International’s 2015 Corruption Perception Index. The executive summary and a link to the full report is available here.

Through our review, we found:

Sector-specific planning -- Almost half of the strategies mention particular sectors as areas of high corruption risk, with some of the most commonly referenced sectors being healthcare and infrastructure. Those observations, however, are not accompanied by sectoral-sensitive plans or engagement with key private enterprise stakeholders.

Change management -- There is a need for more elaboration in just how a specific proposed action might lead to reducing corruption. It seems that the extensive literature from the corporate sector on how to change large organisations could be embraced and translated to governmental anti-corruption initiatives.

Public-private sector collaboration -- Countries are increasingly focusing on tackling corruption in the business sector to increase the attractiveness of investment in the country. Yet, a more sobering part of the analysis was that few countries seemed to engage with the private sector as a key part of the solution. Corporations need to be part of the discussion.  

We hope, through more research in this area, to foster stronger connections between businesses and governments, developing innovative ways to fight corruption collectively. There is much potential synergy between business and governments, not least in the ethics and compliance strategies that the corporate sector has developed over the last 20 years, that should be encouraged proactively in future strategies.

Commercially, we are interested in drawing out specific lessons for companies to enable them to both cope with and play transformational roles in the environments in which they operate. In a future post, we will explore further some of the lessons that emerge from this research.

______

Jason Hungerford is a U.S. and UK qualified partner in Norton Rose Fulbright’s Business Ethics and Anti-Corruption practice in London. He advises companies and financial institutions on anti-corruption, economic sanctions, export controls and anti-money laundering laws in the context of ethics and compliance programme design and testing, regulatory investigations and corporate transactions.

Sam Eastwood is the head of Norton Rose Fulbright’s Business Ethics and Anti-Corruption practice and is based in London. He acted as Independent Compliance Monitor for Macmillan Publishers Limited, reporting to the World Bank and the Serious Fraud Office, and he is part of the UK project team that developed the ISO standard for anti-corruption management programs. He sits on the board of Transparency International UK, as well as the Management Committee of University College London’s Centre for Ethics and Law.

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