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Corruption in emerging markets is a key social concern as well as a bottom-line issue that affects a corporation's ability to compete. Engaging in anti-corruption strategies is an opportunity for corporations to improve their competitiveness while also limiting resources that are intended for disadvantaged populations from ending up in the pockets of dishonest public officials.

Top Takeaways

  1. Corruption not only poses real costs to businesses (including operational costs, legal risks, and competitive risks) but also exacts significant costs on society (including reduced government services for the disadvantaged, constraints on foreign direct investment in high-corruption countries, and crime and instability resulting from decreased trust in government).
  2. Corporations today largely treat corruption as a legal and risk-management problem requiring compliance-driven approaches, including internal corporate ethics training and policies and passive participation in collective action efforts.
  3. Corporations can play a greater leadership role and improve results in the broader anti-corruption effort by treating corruption as a strategic CSR issue and seeking proactive solutions to social problems critical to the business. In particular, corporations can ensure compliance throughout all their divisions and countries; shift from diffuse declarations to outcome-oriented pacts that create effective incentives for behavior change; expand efforts to influence public sector corruption; leverage their financial, technical, and communication assets; and align and integrate resources and staff in order to execute swiftly on these approaches.
While traditional CSR efforts focus on the tension between business and society, fighting corruption presents an opportunity to focus instead on their interdependence in order to create ‘shared value’….But viewing corporate anti-corruption efforts in this light, rather than as damage control or a PR campaign, requires new ways of thinking and different approaches.

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