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Corporate Compliance Trends

~ Anti-Corruption Compliance in Emerging & Frontier Markets

Tag Archives: ethics

The Characteristics of Corrupt Corporate Cultures

15 Wednesday Jul 2015

Posted by Guest in Global

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business ethics, compliance, corporate culture, corruption, ethics

bsr-ataylor-250x344Alison Taylor, the Director of Advisory Services for BSR (a global non-profit organization focused on sustainability) contributes the following article, which was originally posted on the Global Anticorruption Blog.

Despite all the investment in corporate anti-bribery compliance programs, supported by a lucrative consulting industry dominated by investigation companies and accounting and law firms, violations of anti-bribery laws, and firms’ own compliance policies, remains widespread. Why? The usual explanations focus on the external environment (“That’s just the way they do business over there”) or on “rogue employees,” but tend to neglect issues of “organizational culture”—how groups and teams behave when they might have a corruption problem. Yet organizational culture, structures, and incentives have been powerful factors in causing professionals to indulge in systemic corrupt practices.

But what, exactly, are the cultural drivers of corruption? What do a “culture of compliance” and its converse, a “culture of corruption,” actually look like? To find out I conducted in-depth, qualitative interviews with 23 experts on anti-corruption and corporate ethics. My questions were simple: What is the culture like in a corrupt organization? Can we generalize about leadership, decision-making, incentives, values, and behavior in corrupt organizations? Can we use these findings to understand the characteristics of an ethical culture? Read more…

Compliance Q&A with Anwar Hashmi

24 Wednesday Jun 2015

Posted by Stephanie Bandyk in Global, South Asia

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compliance, compliance officers, ethics, UK Bribery Act, whistleblowers

June Anwar Hashmi 1Anwar Hashmi is a Senior Consultant within Global Ethics & Compliance at Integrity Leadership Partners, LLC  in the Washington DC Metro Area. He has over 14 years of experience in designing, developing, and implementing Global Ethics Programs at Tata Steel, a global Fortune 500 company and Tata Group’s flagship company. Hashmi has been associated with the Business Ethics Program of the company since the Tata Group developed its first Code of Ethics in 1998. While at Tata Steel, Hashmi was actively engaged in the institutionalization of the Global Ethics Program through training and sensitization as well as development and implementation of an ethics system and policies. He also initiated a process of benchmarking the Ethics Program among the world’s top multinational companies. Following the UK Bribery Act’s enactment in 2010, Hashmi launched an initiative to raise awareness amongst Tata Group Companies. The combination of these efforts contributed to Tata Steel being named as one of the World’s 100 Most Ethical Companies by the Ethisphere Institute.

CIPE’s Stephanie Bandyk discusses with Hashmi the factors that led to Tata Steel formalizing the firm’s unwritten code of ethics. Hashmi also discusses what motivated other emerging market companies to follow Tata’s lead.

  • Corporate compliance and ethics programs are still not universally common around the world. In your experience, what are some of the factors behind companies in emerging and frontier markets recognizing the need for such programs and then taking concrete steps to implement them?

I can speak about the Tata Group. Codes of Ethics and Corporate Ethics Programs were not well-known subjects amongst Indian corporations. Tata Group had a long legacy of promoting ethical business conduct, which was like an unwritten code for the Group and religiously followed. Prior to 1990, the Indian economy was closed and there was not much competition, with companies operating in a protected environment. Price was determined by government agencies, so selling your product was not an issue. Then, with globalization and the opening of the Indian economy, which led to unprecedented growth of the Group both domestically and internationally, there was a felt need for codifying the values and business conduct to create value-synergy amongst the varied Group companies operating in different regions. A written document could give guidelines on the mode of Business and Personal conduct for the Group companies and employees.  The Western experience on this was used as a best practice and the Group developed its first Code of Ethics in 1998. We benchmarked the Code with the top Global Corporations Code. Since I was involved in the designing and development of the Code, I still remember how we gathered codes of ethics of U.S. companies like Martin Marietta and many others to use as a standard. With the development of the Code, the Group felt the need for an implementation program that could be applied uniformly across the Group. The implementation program was developed and became known as Management of Business Ethics (MBE).

  • What’s motivated other companies to develop similar programs?

Tata Group was the first to develop a formal Code of Conduct. With the opening of the Indian economy, other Indian companies also started looking for business opportunities globally, especially within Western markets, and searched for association or joint partnerships with the U.S. and other developed countries. Such ethics programs are a requirement of doing business in Western or similar markets – companies need to have articulated values and a defined code of ethics. This led to other Indian companies developing a Code of Conduct and a structure to implement it. In fact, Tata’s experience was used as a benchmark by most of the Indian companies. I was personally called upon by several companies, in both the public and private sectors and other agencies, to help them develop a code of ethics. Read more…

Debunking Compliance Myths

23 Thursday Apr 2015

Posted by Anna Kompanek in Global

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compliance, compliance officers, ethics

Screen+Shot+2015-04-09+at+10.57.20+AMI’ve recently read with great interest a blog series by Michael Scher, senior editor of the FCPA Blog, on the common myths that persist about compliance. In three parts (one, two, and three), Scher takes on views on compliance that once might have been accurate but no longer fit the new notion of what compliance should be. He calls this more evolved version Compliance 2.0 where “compliance officers [are] untethered from the general counsel, working directly with C-Suiters, and participating in many of the company’s most important business decisions.”

In other words, greater levels of independence and influence within the company are now increasingly expected of compliance officers in order for them to be able to do their jobs effectively. The process of moving from Compliance 1.0 to Compliance 2.0 is by no means universally complete but more and more businesses realize that this is where compliance is headed.  Read More...

Stakeholder Trust: A Proposal for a Global Business Ethics Principle

08 Thursday Jan 2015

Posted by Guest in Global

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anticorruption, ethics, skateholders

dowden-nicholsThis article originally appeared on the Russian International Affairs Council blog.

By Patricia E. Dowden and Philip M. Nichols

What standards should businesses observe in their own countries, or abroad? Businesses now have resources and influence that rival or surpass those of governments and certainly of ordinary people.[1] The choices businesses make can profoundly influence the lives of every person on the planet. Businesses, governments, and people now recognize that businesses must do much more than merely obey the law. Yet discerning and agreeing on globally appropriate rules for business behavior has been a formidable and contentious discussion among business leaders and academics.

While acknowledging all of the contentiousness, we now offer a modest proposal for a unifying global business ethics principle:

A basic duty of every organization is to earn stakeholder trust.

This principle is meant to replace a more familiar but flawed imperative: that the basic duty of each business leader is to “maximize shareholder value.” [2] Such a duty has never been explicitly written into corporate law, yet is often practiced by CEOs as a way of avoiding dissatisfied shareholders and being replaced by a similarly dissatisfied Board of Directors. But a single-minded focus on profitability – especially very short-term profitability – has serious limitations and risks to the ongoing enterprise; we will explain why earning and maintaining stakeholder trust – including shareholders — can not only serve businesses’ bottom line over time, but also make the market economies where they operate much more sustainable. Read more…

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This blog is produced by the Center for International Private Enterprise (CIPE), a Washington, DC-based nonprofit dedicated to strengthening democracy through private enterprise and market-oriented reform.

CIPE is the international affiliate of the U.S. Chamber of Commerce, and CIPE’s programs are at the cutting edge of anti-corruption and corporate governance around the world. With more than 30 years’ experience in more than 100 countries, CIPE reduces the cost and risk of operating in high-risk markets.

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