NEWS

Honesty Isn't Just Good Policy, It's Good for the Bottom Line

By Stephanie Berrong

Subsidiaries of Daimler charged with paying bribes to officials in Russia and Croatia have agreed to pay a $93.6 million fine to the U.S. Department of Justice (DOJ) and will also pay $91.4 million to the U.S. Securities and Exchange Commission (SEC). It is just the latest in a series of high-profile corporate bribery and corruption cases in recent years that have drawn attention to the need for companies to develop and implement international corporate anti-corruption programs.

In the United States, it is the Foreign Corrupt Practices Act (FCPA) that outlaws the practice of companies paying bribes to officials to do business in countries around the world. Many countries have statutes similar to the FCPA. There’s also an international framework under the Organisation for Economic Co-operation and Development’s (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions that requires the 38 countries that are party to it to put in place laws that criminalize the bribery of foreign public officials.

“What we see is corruption is looked upon as kind of a global threat,” says Helge Kvamme, a partner at PricewaterhouseCoopers in Norway, who specializes in anti-corruption efforts. “It’s a crime, but in addition to a crime, it’s a threat to the society; it challenges so many other areas of life. It [can even play a role in] the increasing difference between rich and poor in some countries.” The same focus has not been placed on other types of economic crime, he notes.

(To finish reading "How to Develop an Ethical Culture," the cover story for the June 2010 issue of Security Management, click here.)


♦ Photo by thinkpublic/Flickr

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