Corruption is an evil which is a worry of many countries. Not just the countries in which it exists but also those in which corruption doesn't exist in such rampant forms. Why? Because countries and organizations interact with one another in the regular act of international business and development and neighborly relations.
For a business enterprise, how does it work? What does one do when faced with corruption while doing business there? You don't know the culture well nor the people, amongst other things. Corruption in the midst of this makes business in countries where corruption exists, a difficult proposition.
With everybody recognizing that these practices are a significant impediment to development and deprives people of their basic rights, initiatives are being taken at national and international levels to address this problem. In addition, it makes economic sense overall to eradicate corruption as it costs money - money from foreign investors.
There are organizations like Transparency international, The United nations and its activities towards removing corruption, which help businesses at different levels. In the United States, the Foreign Corrupt Practices Act (FCPA) makes it a crime to bribe foreign officials.
- Be prepared.
- Understand corruption. Know what is corruption and the forms it takes. Bribes, facilitating payments ,'gifts' out of relevance and context, contracts and deals involving conflicts of interest, intermediary payments etc. are various forms of corruption.
- Understand the region you are planning to do business in. Learn their culture, traditions and way of doing business. There are organizations which have data and information on specific countries to help businesses. Know what kind of corruptive practices you may be facing if you when you do business in that country.
- Understand the legal structure of the region and your own rights there. Also understand the international laws as well as your own national laws which can guide and help you.
- Once you have done the above, you know what you or your employees will be faced with once in the region you are proposing to do business. To ensure that your employees know what is expected of them and to guide them to take the right steps and also to support them in their right steps, draw up a guide and policy within the organization. This policy should clearly lay down the organizations approach to corruption, the practices of corruption and how to recognize them, what are the steps to take when one encounters them - within the organization and outside. A good anti-corruption strategy should clearly evidence the following:
- Senior management commitment with actions taken by them to substantiate involvement.
- Clearly written policies and workable procedures. These should be pertinent to the local situation and should be an action which the person faced with corruption can undertake.
- Clear commitment to ethics through the practice of internal audits and a strong internal controls system - financial and process. This control system should have regular monitoring activities, responsibilities at various level and regular reporting also included.
- A clearly defined communication channel and manner of reporting corruption, fraud or such practices. There should be no holding back because of the fear of repercussions and the policy should assure protection of the identity of the informants.
- Establishment of accountability clearly. Each employee must be accountable for upholding these practices and policies and know that they are accountable. Establishing levels of accountability to vendors will also ensure in controlling the bad practice.
- Empanel vendors only through a strict verification process.
- Communicate this policy clearly and also train your employees well before business is launched in the new region. Conduct regular refresher trainings to ensure that the message stays top of mind always.
The key factor is to establish a strong anti-corruption culture in the business. Once business enterprises become convinced that the long term costs way outweigh the short term gains working with corruption, then the commitment to end this practice is immediate.
Have your own rules, where corruption exists and there is no other way to do business, then walk away to better markets.