Confronting corruption

Confronting corruption

A senior executive argues that policies, controls, and culture must all work together for companies and executives to withstand the inevitable pressures when they arise

A taxonomy of corruption
Corruption and fraud are broad terms that span a wide variety of situations. To help people up and down the line understand the pressures they are likely to face, I have found it useful to parse corruption and fraud into four categories: bribes, speed money, extortion, and employee fraud.

While greedy politicians and venal public officials are convenient scapegoats, corruption is a two-way street; succumbing to it is a leadership choice. Companies must therefore build their own internal competence and develop a robust culture to withstand the inevitable pressures when they arise. Here are four principles to keep in mind.

“We ask our people to persist and prevail, not to take shortcuts. The message is simple: we will work alongside you. We will not hold it against you if a project gets delayed or we lose money; we will do what is right, not what is convenient. Over time, people will know what is acceptable here and what’s not. Social memory is many times more effective than a bunch of policies.”

http://www.mckinsey.com/insights/corporate_social_responsibility/Confronting_corruption?cid=other-eml-alt-mkq-mck-oth-1501

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