Corruption is considered to be one of the most pressing concerns of our time, both because of its negative impact on sustainable economic growth and distortion of fair competition, but also due to its contributing effects on poverty and political instability.
- [+] Motivating business to counter corruption: Sanctions and Incentives
The role of business in countering corruption is undisputed, generating calls from stakeholders such as national governments, intergovernmental institutions and civil society organizations for greater accountability, transparency and integrity.
But the underlying motives of why companies are countering corruption are less elaborated.
Are they doing it only because they are required to by law? Are they doing it because it is the right thing to do? Or does countering corruption actually make good business sense?
Understanding these motivations is paramount to applying effective anti-corruption measures to business; and to thus motivate more companies and their representatives to commit to clean business practices.
In an effort to contribute meaningfully to the effective and implementation-oriented fight against corruption globally, the HUMBOLDT-VIADRINA conducted the project “Best practices on Anti-Corruption Incentives and Sanctions for Business”.
Building on three years of extensive research and interaction with anti-corruption practitioners from across the globe, this project provides the first-ever comprehensive overview of incentives and sanctions which can be applied to increase the effective engagement of business against corruption. Providing practical guidance for actors from the business sector itself as well as for public sector and civil society actors, the incentives and sanctions presented can well be applied to companies of all sizes, from all industry sectors, and operating in any part of the world.
In essence, this project demonstrates that while the common approach of penalizing corrupt business is important to advancing ethical practices, the ‘sanctioning approach’ alone is seldom sufficient. To motivate sound business practices sustainably, incentives form a meaningful and effective tool, which to date is often underestimated or even unknown to those seeking to advance anti-corruption. Targeting the business case, the rationale behind applying incentives is simple and intriguing: providing tangible business advantages to companies which demonstrate ethical leadership motivates even those companies which so far have not seen any value in countering corruption.
This project was supported by Siemens as part of the Siemens Integrity Initiative. The project was conducted by the former HUMBOLDT-VIADRINA School of Governance. The HUMBOLDT-VIADRINA Governance Plaform continues this work and advocates for a combined approach of sanctions and incentives.