Corruption and ethical compass

Corruption and ethical compass
April 4, 2017

In a speech at the Center for Strategic and International Studies (CSIS) in Washington this January on anti-corruption, Kim Jong-Kim noted that there is an inverse relationship between growth and corruption. Corruption is a heavy cost to companies , Increases the costs of managing and running businesses and discourages investors, and is therefore a major impediment to sound and equitable development in the world.

World Bank studies show that global corruption amounts to $ 2 trillion, including $ 1 trillion a year in bribes, and that fighting corruption is a global challenge.

According to the New York Times, in the past four years, 58 companies in the United States paid a total of $ 3.74 billion to settle corruption charges. Since 2009, 67 people have been charged, including 20 who are still awaiting trial while 42 have been convicted for violating the Anti- corruption in the external practices of 1977.

At the beginning of this century, the extent to which corruption and immoral practices of companies were not known to assess the competitiveness of the business environment and the financial performance of countries and companies was marginal and not related to the financial and competitive aspects of the firm.

As a result, companies believed that corruption was linked to the government apparatus, and that combating it should not be part of the company’s strategic objectives and decision-making mechanism. But this narrow view of corruption and corporate ethics has begun to change gradually over the last 20 years. Studies and experiments have shown that corruption is a key issue that has a direct impact on the competitiveness, growth and sustainability of the company.

Although Siemens is one of Europe’s largest industrial companies, with 360,000 employees and a turnover of € 78 billion in 2012, it suffered a major moral blow in 2006 when hundreds of employees at the company were revealed to have paid millions of dollars for consultancy contracts Fake and bribes to many government officials in developing countries, to win huge contracts by placing Siemens executives for certain numbers in small scraps of paper on their employees’ offices, meaning that the employee could pay a bribe on the amount on the paper to avoid leaving any evidence condemning executives or Walsh KE.

The scandal revealed that over 1.3 billion euros were paid, while the company incurred fines exceeding 2.5 billion euros, in addition to the loss of many large contracts.

Many scientific evidence and studies have shown that the legislative system against corruption and bribery can not be effective in any country unless companies are part of this system. In 2002, Transparency International developed principles to combat corporate bribery, believing the role of the private sector in fighting corruption.

In the UAE, companies, public or private, remain the weakest link and are unable to keep up with the jumps being made by the State in its relentless efforts to activate the preventive and regulatory measures necessary to ensure good use of public funds and to combat all forms of financial and administrative corruption. If these companies do not build a culture of transparency and ethical commitment, it has become a burden on the state in the long term.

In contrast to the private sector in the UAE, it is easy to see what has been achieved by the public sector to spread a culture of integrity, transparency and combating corruption. The state has set standards and practices for minimum procedures to ensure the use of public funds and to combat all types of corruption in government institutions. Accounting in 2011 a guide to best practices in the fight against fraud and corruption in the public sector institutions.

This initiative is an activation of the principle of “promoting transparency and good governance systems in the federal authorities”, which is one of the general principles underpinning the UAE government’s strategy (2011-2013). The State has also adopted many laws and regulations that have helped to create an integrated procedural and judicial system, Has been ranked first in the Arab world and 27th in the world, on the Corruption Perception Index 2012, launched by Transparency International, and the UAE ranked first in the Arab world and the fifth in the field of enabling cross-border trade in the Doing Business Report 2012 Issued by the World Bank.

The flexibility and speed of public sector adaptation in the UAE and its superiority over the private sector, with a clearer vision of the challenges and how to deal with them, makes the private sector a real challenge to keep pace with the public sector and create a true partnership based on integration and cooperation in the face of economic challenges.