Effective business integrity needs incentives, enforcement and capacity

Effective business integrity needs incentives, enforcement and capacity

Corruption knows no boundaries. In an interconnected world and economy tackling corruption and its negative effects cannot be successful without concerted and sustained engagement. Business integrity is important in this regard, as companies interact with all sectors of society locally and internationally.

TI Sweden has, as part of a Swedish Institute-funded project, conducted a needs assessment with the aim to identify mechanisms for effective business integrity among companies present in the Baltic Sea region – with emphasise on Sweden and Lithuania.

We have interviewed compliance officers, legal experts, journalists as well as representatives from business organisations and civil society in order to get a view of challenges and opportunities in achieving effective business integrity.

The findings show that although many companies have implemented anti-corruption programmes, they are restricted to large, mainly international, companies. However, practices from international businesses coupled with increased expectations from customers, clients and employees are influencing local companies to act with integrity and responsibility.

Board members and managers need to fully grasp the consequences of the lack of business integrity – not only in direct costs, but also loss of productivity and loss of qualified personnel.

”The managers or the Board need to be given information about the risks for corruption and to understand that the risks not only pertain to bribes. Don’t take it for granted that they know this. But, when they do understand, the resources will come.”

Only 15% believed that policies and guidelines are the most important for effective business integrity.

”The policies are there, but the human element is lacking.”

Instead, training, information and communication were considered as the most important tools for effective business integrity. Many requested a greater focus on continuous and recurring training and dialogue, while training in many companies is seen as a ”one-off” occurrence.

Almost seven out of ten believed that legislation prohibiting bribery is effective. Nevertheless, major discrepancies in the legislation itself and its enforcement were highlighted by many and 85 percent saw the need to further strengthen this.

”The legislation is driven by scandals. We [the Baltic Sea region] are lagging behind the rest of the world.”

Read more about this, other findings and trends in the needs assessment that can be found here.

Based on the findings, TI Sweden recommends concerted parallel efforts to enhance business integrity capacity, build incentives for ethical business culture, and strengthen effective enforcement.

For more information on the project or the needs assessment, contact Lotta Rydström, TI Sweden, at lotta.rydstrom@transparency.se.