Are bribery and corruption the poor relations of corporate social
responsibility? Their inclusion in responsible business practice
guidelines often seems an afterthought. The United Nations Global
Compact made bribery and corruption its tenth business principle only
after it had published the other nine. Rarely does corruption receive
more than passing mention in CSR reports.
The reasons are not
far to seek. Action in feel-good areas – the environment, community
work, staff involvement – can enhance reputation. Talk of
anti-corruption measures raises the suspicion that there is a problem.
Moreover, the natural home of bribery and corruption is the sales
function, and isn’t it a company’s prime social responsibility to make
profits?
Except for helping to set up the Extractive Industries
Transparency Initiative, the UK government has done little. Though it
signed the OECD anti-bribery convention eight years ago, not one
company has been prosecuted for overseas bribery. Proposed anti-bribery
legislation has been watered down. The Export Credits Guarantee
Department is alleged to have nodded through loan guarantees to at
least one company under investigation for corrupt practices. Critics
charge that in underwriting commissions, the ECGD effectively
underwrites bribes. Yet it is under the wing of the same department –
trade and industry – as the CSR ministerial team.
Nothing
would concentrate corporate minds more than confirming the Serious
Fraud Office’s role in leading foreign bribery investigations, as
recommended by the OECD. As things stand, no single department is
responsible for investigating allegations.
Such footdragging
makes it vital for anti-corruption measures to be recognized as part
and parcel of CSR. Crucially, some new tools are about to become
available: this month Transparency International publishes a six-step
guide for companies on how best to combat bribery and corruption.
These
are secret vices, which makes improvements in disclosure particularly
important. ‘Hard’ performance indicators such as violations and number
of contracts terminated have their place, but ‘soft’ measures –
employee awareness, training and management systems – are arguably more
relevant, for they indicate a change in culture. The Association of
Certified Chartered Accountants’ reporting awards this year have
anti-corruption measures as a special theme. Elsewhere, FTSE4Good is
working on criteria for this area, and Business in the Community’s
Corporate Responsibility Index now reviews companies’ efforts to
counter bribery. Let’s hope CSR’s poor relations will soon be sitting
above the salt.
