Most business entities hesitate to take a firm stand against corruption, even in situations where it is widespread. Some may see benefits from indulging in corrupt practices such as faster processing of permits or less interference from governmental officials.
At the same time, the perceived costs of corruption are low, due to poorly formulated laws and ineffective enforcement, which leads to a very low likelihood of prosecution and punishment.
As a result, as much as they may detest corruption, most organisations end up succumbing to it. Indeed, many see themselves as victims of the endemic corruption rather than as its perpetrators – “Everyone else is doing it,” they may tell themselves, “So we have to do it too.”
There are a lot of benefits that accrue once an organisation embraces business ethics and takes a strong anti-corruption stand.
FIRST, it enhances an organisation’s corporate image, brand and reputation. Ethics is a major differentiator in environments where a lot of business are corrupt. This is because it is more noticeable in corrupt environments than it would be in ethical ones; it is easier for an ethical company to stand out in a corrupt environment. Thus, a company is able to build a name for itself and differentiate itself from the rest of its competitors. This therefore increases its streams of revenue.
SECONDLY, being an ethical company is that one enjoys a good working relationship with the stakeholders such as customers or investors as they place a higher value on ethical behaviour in corrupt environments.
THIRDLY, transparency helps to flag corruption risks. There is a direct link between higher levels of corporate transparency and reduced levels of bribery, money laundering and tax evasion.
This, therefore, helps it mitigate the impact of penalties. As strong anti-corruption stance helps to prevent monetary fines, loss of contracts, debarment from lucrative markets, criminal liability and/or negative press.
Corruption is a risk that companies of all sizes increasingly recognise. There has been a positive trend of establishing anti-corruption programmes, which can be universally found in companies, in order to mitigate legal, commercial and reputational risks.
An anti-corruption programme has two benefits: First, it demonstrates a company’s response to the legal obligation and responsibility to reduce the risk of corruption. Second, it represents the company’s commitment to operate a clean business.
How then should business enhance ethics. First, they need to put in place an ethics and anticorruption policy which frames their ethical behaviour in a way that resonates with as wide a network of stakeholders as possible. Importantly, we find that it is crucial for organisations to reach beyond their employees and clients.
Second, business leaders and managers need to ensure that harsh punitive measures are taken against those who engage in corruption so that they can act as a deterrent to every person.
Fourth, ethical organisations need to strategically build partnerships with high-status individuals and organisations, so that their ethical reputations can diffuse as widely as possible.
Furthermore, if they are regulated by professional bodies, for example the Law Society of Kenya that have a code of ethics, they should ensure that their company’s code of ethics is in line with that of the professional body.
This tactic, referred to as “reputation borrowing,” has been used by start ups to build their prominence among a wide group of stakeholders at an early stage in their business cycle when they have limited reputation.
In extreme cases, organisations seeking to operate ethically will need to resort to judicial action to further their fight against corruption and work with other like-minded groups to support their cause.
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