This Scorecard is due to be updated in 2018
In the words of the UK government: “Bribery and corruption create a disincentive to trade as well as uneven trading conditions that can damage economic systems and the individuals within them.”
In a global economy, all business is obliged to pay regular levies, duties and taxes to governments: these are the normal costs of doing business. But some companies also make irregular payments, which end up in private hands instead of providing public goods and services. This is a particular problem in countries where citizens struggle to hold their governments and public officials accountable. Some of these payments and donations may not be illegal, but can still offer an unfair advantage to companies that pay over those who cannot, or will not. For example, 'facilitation payments', which are payments made to low-level officials in overseas trade in order to speed up or obtain routine administrative processes, are illegal under U.K. jurisdiction but legal in the U.S.A.
Corruption may be as simple as paying money to obtain preferential treatment in a procurement process. It may occur through excessive and/or inappropriate payments or donations, for example, made to political parties in the clear expectation that this will confer unfair benefit on the donor. It may involve payment for insider information, such as a bid price. It may be more subtle and insidious, e.g. offering a job or access to a university place to an immediate family member of a person in authority.
The problem therefore is not limited to the bribing of personnel in government and the public sector but equally applies to corrupt behaviour between private entities or individuals. The 2010 UK Bribery Act introduced a corporate offence of failure to prevent bribery by persons working on behalf of a business. Companies can take steps to reduce risk, and protect themselves, by demonstrating that they have adequate procedures in place to prevent bribery.
There are many steps that a company may take to prevent corrupt and dishonest behaviour. These include, e.g. establishing an organisational culture in which such behaviour is understood to be unacceptable, distributing and disseminating internal guidelines against corrupt behaviour, reviewing whistleblowing procedures to ensure that internal wrongdoing can be reported and dealt with effectively, providing contractor guidelines to ensure suppliers understand company policies and expectations, and/or due diligence to ensure suppliers are also taking steps to prevent dishonest behaviour. Public disclosure and reporting of financial transactions may also help build trust and business reputation.
A framework of anti-corruption policies will vary according to business sector and circumstances but may include:
● Clear articulation of the company’s stance on bribery
● Details of procedures to be followed during business transactions
● A prohibition on offering, giving or accepting bribes
● Guidelines on offering and accepting gifts, hospitality or expenses by employees, or other parties that could influence the outcome of a business transaction
● A clear explanation of circumstances that could be considered a 'conflict of interest' for company employees or suppliers
● Guidelines on donating to special interest groups, whose activities may include lobbying
● Public disclosure of donations and payments the company, or its intermediaries, have made to political parties and charities.