by Celia Lourens | Published on 25 June 2018 for The Ethics Institute monthly newsletter
In the context of evolving global legislation and intensified support for the United Nations’ and the Organisation for Economic Cooperation and Development’s missions of combating corruption, businesses face increased pressure to comply with ethical standards, rules and laws.
"There is power in numbers, and companies must stand together, and stand firm, on what they define as acceptable and unacceptable behaviour."
Corruption and bribery are, undoubtedly, global phenomena that continue to negatively impact business operations, particularly as value chains become ever more complex and transnational. The more moving parts there are, the harder they are to manage. To mitigate these risks, companies have to establish strong ethics and compliance programmes, and engage in activities that positively impact the business environment in their geographic areas of operation.
We often (and most unfortunately) see a reactive response from multinationals who have been ‘caught’ or implicated in corruption or bribery-related incidents. Naturally, these companies do have to address wrongdoing to mitigate reputational fallout, but why wait to be caught before taking steps to do the right thing? The good news is that some multinationals are actually looking at proactive engagements, and a group of multinationals operating in South Africa has already taken steps and is setting a positive example. This group is called the Coalition for Ethical Operations (CEO Coalition).
The group’s philosophy is simple: no company can solve a global crisis on its own. It is the very nature of modern-day supply chains that every single transaction has multiple touchpoints, and a whole host of different organisations are involved along the way. One organisation standing up for ethical practices, but surrounded by others simply pursuing their own ends via whatever means necessary, is not going to get very far making a positive impact, or even staying afloat. It has never been more important for organisations to adopt a co-operative, multilateral approach to doing business.
SNC-Lavalin Group Inc. (a Montreal-based engineering and construction firm) initiated this collective action and invited a number of other large multinationals with South African operations to join. Importantly, the commitment made by each company to further responsible business practices must be signed by a senior person with executive authority. The play on the acronym “CEO” is also a subtle nod to the idea that the group comprises individuals with clout, and that its objectives are strategically significant.
The purpose of the CEO Coalition is to engage in a programme of activities that promote doing business ethically and reducing bribery and corruption across Sub-Saharan Africa. The specific objectives are as follows:
- To share best practices in promoting ethical operations and preventing corruption
- To promote training of Small-to-Medium Enterprises, particularly company suppliers, on ethical operations and preventing corruption
- To engage in ad hoc voluntary collective or collaborative action focused on the promotion of ethical operations or the prevention corruption
The Coalition is still a fairly new grouping, but it has already hosted several workshops and best practice sharing sessions focused on important subjects related to fighting corruption and changing ethical behaviour. We need more multinationals to embrace the important role they can play by being proactive and going beyond a mere tick-box approach to ethics and compliance.
Because of their huge buying power, extensive work forces and multifaceted value chains, the potential positive impact of multinationals being ambassadors for ethical practices within their spheres of influence is undeniable. We applaud those organisations who do not hesitate to openly commit to doing business the right way and recognise that the courage to do so always starts with committed individuals putting their hands up and going out of their way. They recognise their place in a connected global pool of organisations, and choose not to shirk the responsibility this brings to encourage others around them to build a healthier business environment.
It is imperative for every responsible citizen – be it as an employee, innovator, state official, entrepreneur or scholar – to play their part in holding organisations accountable. The example set by the CEO Coalition is an invitation, or a challenge, to other organisations to become a dynamic part of the movement to lessen deceitfulness and elevate awareness of values-based business. Corruption is not going to go away of its own accord. There is power in numbers, and companies must stand together, and stand firm, on what they define as acceptable and unacceptable behaviour. Pressure from peers can be a powerful incentive to change.
Celia Lourens holds the position of Project Manager at The Ethics Institute. She has a BCom Honours Degree in Business Management from the University of South Africa and is currently completing a Masters in Business Management at University of Pretoria.