The Business for Rule of Law Framework
Corruption has become a chronic disease, remaining unsolvable and consuming development across all sectors, public and private alike. Businesses have considerably been impacted by operational misconduct and diluted growth in terms of reputation, financial gain, and social contribution. According to the Ten Principles of the United Nations Global Compact, the issue of extortion and bribery is categorized into the Tenth Principle, suggesting that businesses should work against corruption in all its forms. The UN Global Compact has not only been supporting and monitoring the rising business tide against corruption since 2009 but also provide a concrete guideline for anti-corruption scheme towards more transparency from the global private sector.
THE EFFECT OF CORRUPTION ON SUSTAINABLE BUSINESS
On both international and domestic scales, organizations suspected to be associated with fraud-prone activities have seen less progress than those with clear records, signifying that corruption is “a major hindrance to advancing societies.” For organizations that seek alignment with sustainability and the SDGs, the corruptive tendency can distort development priorities. For example, when funding and capital gain from businesses should be complementary with social causes and compensate for environmental degradation, the company loses the ability to pay back to the community, minimizing its chance of being recognized as a sustainable business. Moreover, the firm reputation is one of the essential factors for investment. As investors have become more concerned about the well-being and a green lifestyle, companies with ethical ambiguity can negatively impact People and Planet, shattering investors’ trust and confidence.
The rapid development of corporate governance rules around the world is also prompting companies to focus on anti-corruption measures as part of their mechanisms to express corporate sustainability and protect their reputations and the interests of their stakeholders. Their anti-corruption systems are increasingly being extended to various ethics and integrity issues, and a growing number of investment managers are using these systems as evidence that companies undertake good and well-managed business practices.
A few steps must be taken to reduce internal and external corruption in a company. As the first step, introduce anti-corruption policies and programs within their organizations and business operations. Establishing clear policies and procedures for all business operations is critical to reducing internal corruption. This should include rules for conduct, financial management, and reporting. Require all staff to adhere to and acknowledge these policies, and ensure that they are reviewed and updated regularly. As for the external, report on the work against corruption in the annual Communication on Progress; and share experiences and best practices by submitting examples and case stories. Lastly, having collective action. Which refers to everyone within the ecosystem collaborating to reach a common goal: reduce corruption.
Reducing a company's corruption is critical for fostering the 3Ps: Profit, People, and Planet. People, in particular, are the ones who carry out the work and are impacted by any company decisions. People must take their own steps to reduce corruption to increase the value of their businesses.
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