A short presentation outlining one of the biggest challenges for businesses: corruption.

1. HOW DO COMPANIES
DEAL WITH CORRUPTION?

2. CORRUPTION RISK
MANAGEMENT
○ Legal framework and corporate implementation
○ Corruption: consequences and risks
○ How do companies bypass anti-corruption
frameworks?

3. FRAMEWORKS &
IMPLEMENTATION
The good, the bad and the corrupt

4. Corruption is the abuse of entrusted power
for personal gain.
Multiple forms:
○ bribery
○ embezzlement
○ fraud
○ extortion
○ ...

5. THE LEGALITIES OF
ANTI-CORRUPTION
A body of anti-corruption guidelines and treaties exists:
○ For states UNCAC, OECD Convention, etc.
○ For business US Foreign Corrupt Practices Act (FCPA), UK Bribery
Act, International Chamber of Commerce Rules of Conduct
But at the end, corporations define
their own anti-corruption policies.

6. CONSEQUENCES & RISKS
Corporate corruption around the
(corporate) world

7. “
Corruption is
pervasive
… And so are its
consequences
worldover

8. CONSEQUENCES
OF CORRUPTION
○ Artificially high prices and low quality
○ Uneven distribution of wealth
○ Low attractiveness for foreign investors and
international trade
○ Low-quality education and healthcare provision
○ Political instability
○ ...

9. CORRUPTION IS FAR
FROM HARMLESS
Corporate
○ financial losses from supply chain
○ asset theft and other fraud
○ regulatory violations
○ reputation/corporate image
○ CSR issues (e.g., breaching environmental safeguards)
Personal:
○ prosecution
○ sanctions (financial fines, disbarment from holding office,
jail sentences).

10. BYPASSING ANTI-
CORRUPTION
None shall pass! (Sort of)

11. CORPORATE POLICIES
A riddle:
○ do company executives play around anti-corruption
policies? (hint: yes)
○ does bypassing anti-corruption policies generate
new risks? (hint: yes)
Company executives are paid to maximize profits, not to
behave ethically. Evidence suggests that they behave as
corruptly as they can, within whatever constraints are
imposed by law and reputation.
(E. Porter, the New York Times, ‘The Spreading Scourge of Corporate Corruption’, 10 July 2012)
“

12. CORRUPTION RISK
ASSESSMENT
(Ernst & Young Global Ltd., ‘Bribery and Corruption: Navigating the Global Risks’, 2012)
○ company’s geographic location(s)
○ business sectors scoped
○ business partners + nature of activities &
transactions
○ interactions between partners & local officials

13. Gold, silver
HOW DO BUSINESSES
BYPASS ANTI-CORRUPTION
FRAMEWORKS?
Offshore & Shell Companies

14. $5.8 million
bribe money
Gold, silver
HOW DO BUSINESSES
BYPASS ANTI-CORRUPTION
FRAMEWORKS?
Offshore & Shell
Companies
Collusion &
Money Laundering

15. $5.8 million
bribe money
19 dead
Gold, silver
HOW DO BUSINESSES
BYPASS ANTI-CORRUPTION
FRAMEWORKS?
Offshore & Shell
Companies
Collusion &
Money Laundering
Conflict of interest
& Influence Peddling

16. CONCLUSIONS
Corruption:
○ is not a risk limitation tool
○ may generate new risks
○ may be legal
○ has to be included in the risk assessment process
○ produces irreversible damage

17. THANKS!
Oh, and do you have questions?