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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.
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.
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