Shield your organization from Corruption
Headlines over the past year have highlighted the pervasiveness of corruption and bribery in organizations, with some recognisable brands dealing with public scandals.
Despite the prevalence of such scandals, the business community has shown limited action to combat this. Many organizations have made little or no progress in fighting corruptive behaviour, despite the fact it protects businesses’ bottom lines and brand reputations.
Due to the fact that private organizations largely provide goods and services to Governments, even your organization is not immune to corruption.
A responsible business should shield it’s from corruptive behaviour. Some thought provoking questions to begin with are:
The question therefore is what steps are you taking to foster business ethics?
Do you have business ethics key performance indicators (KPIs)
What methods do you have in place to fight corruption?
The reality is no company whether big or small is immune to the risk of corruption scandals, but responsible businesses can take mitigation measures to reduce both the likelihood and the impact of such situations.
Successful enterprise anticorruption programmes rely on fostering ethical business practices and the best place to start is within the supply chain. Companies today are held to high ethical standards by customers, stakeholders, investors and regulatory bodies. Not only are they liable for their own actions, they are responsible for their suppliers and third-party vendors. If something happens in the first or second tier of the supply chain, it can have a ripple effect both legal and reputational on the brand.
As such, the business community should be intrinsically motivated to mitigate these ramifications by promoting responsible behaviour both internally and externally, as well as through internal and external audits and risk assessments.
Procurement can use its critical and unique position to monitor, enforce and track ethical behaviour within the supply chain.
Ways to lower exposure to bribery and fraud
Regulations that prevent corruption are becoming increasingly common. But, while such laws are important and valuable, they are not perfect. It is vital for companies to take a proactive approach to anticorruption management and institute their own practices to prevent issues from within. There are several best practices and components of a well-rounded strategy that can ensure issues like bribery, extortion, and fraud are less likely to infiltrate the workplace.
As a rule, a solid anti-corruption programme should include enforcement of formalised policies that foster ethical behaviour and allow companies to communicate their commitment, objectives and strategy for preventing issues to all stakeholders, partners and suppliers. It should also include concrete internal control measures that effectively address risks outlined in the policies and monitor the implementation of these measures through reporting on results.
Assess your business
Conduct a corruption risk assessment pinpoints the types of risks companies are exposed to based on their specific operations. Risk assessments are highly effective and should be one of the first steps taken in designing a programme. Such assessments allow companies to take a deeper dive in assessing risk and corruption within their own business as well as those in supplier and partner operations.
Use Procurement Technology
When organizations experiment with removing the personal element and providing more visibility into transactions, they find that the pace of bribes slows. The beauty with e-procurement is that even when the bribing is at the top level, the trail of transactions is readily available, hence the reason for large number of corruption incidences in public domain than witnessed before.
E-procurement replaces paper-based procurement processes with an electronic cycle, encompassing everything from planning through contract management. It is very open, inclusive and Vendors establish an auditable online reputation for quality over time.
Ensure everyone touching the business is held accountable, including third-party vendors. It is important to consider third-party affiliates such as distributors, brokers, agents, consultants, advisers and freight forwarders involved in everyday business practices, as these companies have a direct effect on client relations and business activity
There are laws such that hold companies accountable for the actions of their third-party vendors and suppliers; meaning there is a large liability factor for companies. If businesses aren’t monitoring their vendors for ethical behaviours, they are doing their organisation, customers and stakeholders a disservice.
Companies should carry out due diligence processes, such as background checks and thorough assessment programmes, to address these issues at the point of supplier registration.
Leveraging sustainability intelligence and implementing assessments that provide a rating and benchmark of the anticorruption management system and other sustainability criteria, help tremendously from a mitigation standpoint.
Keep the whistle blowing on corruption
Whistleblowing is the most common practice currently used by the world’s organisations to fight corruption. It allows employees to voice concerns in a safe environment.
To be effective, companies should enact a loyal reporting channel to ensure confidentiality among team members. Whistleblowing is only advantageous when other core measures are implemented such as proper employee training to identify certain cases of corruption, as well as internal controls to deter these behaviours from the outset.
This step may be most important in effectively changing behaviour among employees in how they act and their willingness to report more frequently and without hesitation. Training sessions will assure companies their employees are fully equipped with an awareness of corruption risks at operational and supply chain levels, as well as provide the tools needed to combat the issues.
Training can take place in various formats, such as in-person workshops or online tutorial videos, depending on what best suits the organisation.
Control audits and examine behaviours
To successfully prevent corruption, start by understanding what is happening in your own organisation. It’s wise to hold regular check-ins to ensure all employees are on the same page and identify how the management system is working to reduce corruption.
The state of anticorruption is not all doom and gloom. This is the time to act and drive positive practices that will take the company into the future. Since corruption comes in many forms, businesses must collaborate with their teams to determine where to focus their time and ways to implement best practices. Through teamwork and innovation, organisations can help solve corruption issues within the global supply chain and put an end to such harmful practices.
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