ETHIC Intelligence hosts its third annual international conference
on corruption prevention Standards and Guidelines

OECD Conference Centre, Paris - Monday, September 10, 2018

ETHIC Intelligence is very pleased to host its third annual international conference on Standards and Guidelines in corruption prevention on September 10, 2018 at the OECD Conference Centre in Paris. Click below to view photos and videos from last year’s event where experts from business, civil society and government exchanged and debated issues related to the fight against corruption.

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Anti-corruption compliance: why it’s a board issue

Many compliance officers have voiced frustration that their boards don’t take the anti-corruption compliance issue seriously; that is, that they treat it as a purely legal issue and not as a strategic concern that can have an important impact on business development.


For many boards, the sole purpose of an anti-corruption compliance program is to mitigate a (very real) legal risk. They espouse the point of view that, albeit justifiable in terms of legal protection, anti-corruption compliance programs represent a ‘non value generating’ cost center. They therefore seek to keep the functioning costs – travel, training, due diligence, number of team members, etc. – to a minimum.


In return, all they expect from their anti-corruption compliance program is that it minimizes the risks brought about by their sales operations. In short, it offers them a certain level of protection from a risk which they perceive to be purely legal.


But what if corruption was not just a legal risk? What if it were, above all, a business risk? This is where compliance officers have some serious board-level convincing to do.


Corruption poses a more serious threat in terms of business development than it does with regards to the threat of prosecution: this is the message that the top management of all companies would do well to integrate.


The reasoning is simple. If a sales person relies on bribes to sign a contract, he or she will never voluntarily inform the management of this. Perhaps because it is quite recognizably illegal to pay bribes; perhaps because the sales person would rather put emphasis on his or her sales talent. Either way, the management is lulled into believing that the company signed the contract because its products/services and pricing best fit the demands of the client.


Because it is lacking a crucial piece of information (the real reason the company won the contract), management is under the illusion that its offer meets market demands. Why call into question one’s prices, products or services when clients are visibly satisfied? Without question, bribes distort the market feedback crucial to making strategic decisions.


In time, bribes cover up the widening divide between a company’s product and the needs of the market. While losing contracts generally helps companies re-evaluate and re-adapt their offers to better meet market demands, winning contracts in exchange for bribes seriously threatens their competitiveness and, ultimately, could jeopardize their very existence.


To operate, companies must constantly take necessary measures to guard against a multitude of risks: stock market fluctuations, trademark protection, etc. But there is one risk that a company can never insure against: the risk of no longer being able to meet market demand. Only the lessons learned from repeated failures and from the difficulties encountered by sales operations can help management make the necessary strategic decisions, in terms of investment, R&D, restructuring production capacities, etc. to turn the ship before it is too late.


Corrupt sales practices represent more than a legal risk; they impose a major business risk by jeopardizing the quality of strategic decisions.


When trying to convince your board that anti-corruption compliance is important, talk first about its impact on strategy and business development. This is how I’ve seen many executive committees ultimately take the issue seriously.


Coming soon

  • The strategic dimension of anti-corruption compliance
15 MAR, 2015 Category : Blog 5 719 Views

Comments (5)

  • Patrick Henz says:

    Hello Philippe,

    thanks for the interesting article! Indeed Compliance is the foundation of sustainability. As you pointed out correctly, if you are winning a project with a bribe, you send a wrong decision to the marketing department and in the following time you not develop your products as it would be necessary. Slowly you lose competitiveness and every time you have to pay higher bribes (as the technical gap between you and your completion gets higher). Not to talk about the “casino risk” that you get caught. And most of the times you get caught…

    Compliance risks are business risks!

  • Ayotola Jagun says:

    This is an interesting perspective. Is there any empirical research or a case study out there on the long-term impact of bribery on a Company’s ability to innovate and ensure its products and services meet market specification and demand?

    • Philippe Montigny says:

      Siemens definitely noticed the damaging impact of corruption on innovation and productivity when it began its zero tolerance for bribery following its trials with Germany and the US. Shortly after the settlements certain operations had to be terminated or completely reorganized in order to reignite innovative practices that had been stifled during the years when bribes were responsible for winning contracts. Siemens realized immediately that investments needed to be made in innovation in order to regain its supremacy in the industry. I expect case studies and more empirical evidence will become available as more and more data are collected in this rapidly evolving sector. It is interesting to note that very often the most financially successful companies, like Siemens for instance, are those with the most stringent anti-corruption compliance programs.

  • Lynn Brewer says:

    Phillipe – Thanks for recognizing this important issue – a great case to look at is Coca-Cola and whistleblower Matthew Whittley. Coca-Cola paid “bribes” ($10,000 to families to participate in the market areas) to alter the results of a marketing study. When Matthew Whittley, who was in accounting, tried to account for the bribes, he contacted the COO and promptly fired – causing him to file suit – Coca Cola lost 6 years worth stock value when the suit and thus Coca-Cola’s bribes became public.

    • Montigny says:

      Thank you Lynn for sharing this example. I believe we are useful to compliance officers when we provide them with appropriate case studies that help them to convince both their board and their sales manager that compliance matters !.

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Philippe Montigny President, ETHIC Intelligence Certification Committee

Philippe Montigny is CEO of ETHIC Intelligence and Chairman of its Certification Committee. Philippe has over 20 years of experience in advising companies on strategies to prevent corruption and leverage business integrity.

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The compliance community must navigate amidst an ever-changing landscape of laws, recommendations, emerging corruption risks, trends in investigations and the threat of prosecution. The ambition of this blog is to bring this landscape into focus while raising compliance effectiveness from both a business and legal perspective.

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