There is no more dangerous menace to civilization than a Government of incompetent, corrupt, or vile men. Corruption in today’s day and age has reached a different level altogether. Dealing with it has become a talent that most of us in the world have mastered. There is no doubt to this fact that, all of us have experienced it some or the other time in our lives. Moreover, this phenomena has become so common these days that you get to experience it almost all the time. Corruption has paved its way into our normal lives as well. From dealing with tweaked meters in rickshaws to the nuances of the ministers in the country, we have become a pro. No one is really bothered and does not talk openly about the corrupt practices. Rather, people have started to live with it.
Fighting corruption has become a global phenomena. There are a few who have been working hard to deal with this situation, but have failed. While, there also exist few others who have been able to make a difference. Although this had a minimal effect, people have become more aware and cautious.
Companies and large organizations are largely involved in corrupt practices and unethical conduct of business. They adopt fraudulent tactics to earn unethically from their customers. Such organizations take help from a third party by bribing them. Those who help them in the process, either do it out of destitution or an emergency. While, many others do it just out of greed.
It is important to keep a check on such companies, as business cannot be conducted unethically. In order to prevent these practices from happening, many countries have their own anti-corruption laws. In India, there is Prevention of Corruption Act, 1988, in USA there is Foreign Corrupt Practices Act, 1977 and similarly UK has Bribery Act, 2010. These laws have set of regulations which are applicable to all those organizations which are mentioned in the act. If an entity goes against a regulation and commits an offence, it is liable to a penalty. The authorities have mentioned the punishment for such offences in each act. There is a likelihood that the person is fined or imprisoned. The jail time may be higher depending on the severity of the offence.
How to prevent it?
Businesses should ensure that their systems and internal controls are in place to stand strong against corruption. Even when an individual in the company commits an offence, it should not affect the company’s image. Proper evidences should be provided by the top level management to prevent the company. The individual is responsible for his own crime. He should be penalised and further actions should be taken against him by the court.
It is important for the business to prevent itself. This kind of negative publicity affects its image in the market. The company may lose its position in the market which would result in the diminishing of its shareholder value. To avoid such consequences, companies should have a proper compliance programme in place. A programme that helps the management and board members to keep track of their employees performance and risks in the business. It can include the following elements in its programme:-
Under this process, management can identify the applicable regulatory requirements and risk of corruption involving their employees. Risks may be internal as well as external. Companies should have proper controls in place to prevent themselves from the prevalent risks of third parties. These third parties aid the businesses in carrying out their external operations smoothly. Suppliers, vendors, distributors etc are involved in various processes involving the business. There are chances of data breaches or revelation of company data involving these third parties. Hence, the company should time to time assess their external parties and keep track of all their activities.
The board of Directors should time-to-time oversee the potential risks and threats from the external environment. This way they will be able to identify the loopholes in their compliance program. By doing so, they can easily make the necessary amendments and improvise the programme.
Executive management supervision
Organisations should appoint a senior executive from the management to manage and coordinate the whole programme. He should have the support of various resources which will help him in supervising the compliance programme.
Policies, standards, procedures & reporting mechanisms
The organization must communicate the standard anti-corruption policies and regulations to its employees. They should design proper mechanisms in place to report any kind of breach in code of conduct by the employees.
Internal controls and governance
A company should have its own set of internal controls to regulate the performance of its employees. They may be in the form of HR controls, accounting controls etc, which employees need to follow. These controls govern the employees and make them accountable for their own jobs. With the above mentioned elements in place, companies can easily reduce the conduct of unethical practices in their business.
Therefore, with corruption taking over the world of business, companies should ensure that they prevent themselves from the trap. It is impossible for the management to supervise everyone at the same time. Hence, it is important to have proper set of regulations and policies in place to govern the employees. These policies will make them accountable for their own job. They will take tasks seriously and also, execute them efficiently. Time-to-time self-assessments will also help the employees to understand their behavior. By undertaking an effective compliance program, management can build a sense of governance in the minds of their employees. This will prevent the company from any kind of future violation or fallout.Add to favorites