Corporations and
Corruption:
What Role for Companies
Emerging Framework
 Corporate
Responsibility Norms
 Corporate
Governance Principles
 Treaty-based
Rules
Common Elements
 Obligation
to criminalise bribery and
other corrupt practices
 Natural and Legal persons
 Broad jurisdictional reach
 Criminal, civil and administrative
sanctions
 Monitoring
 Public Scrutiny
OECD Convention
Criminalises bribery of foreign public
officials
 Applies to bribery in international business
transactions (excludes facilitation,
“grease” payments
 Territorial/nationality jurisdiction
 Disallows economic and political
considerations
 Facilitates extradition and mutual legal
assistance
 Prohibits tax deductions for bribes

Monitoring Mechanism


All Parties must undergo monitoring
Results are submitted to international
body of Parties

Parties must implement recommendations

Evaluations are made public
Monitoring Phases
 Phase
1 – assesses whether
countries have correctly transposed
the Convention in national law
 Phase
2 – evaluates whether
countries are effectively applying
their national laws in practices
Where do we stand?
35
30
25
20
Phase 1
Phase 1 bis
Phase 2
15
10
5
0
Phase 1
1 bis
Phase 2
Impact on Company Behaviour
 “…awareness
of the Convention has
hardly improved in the three years:
only 7% of all respondents
expressed familiarity with the
Convention compared to 6% in
1999”.
TI 2003 Global Corruption Report
“In a notable development, scores
were found to have improved slightly
since the 1999 survey: companies
are marginally less likely to bribe
now than three years ago”
Increase in Risk Awareness
Low public tolerance
 Internal company controls to increase
transparency, prevent bribery, improve
corporate governance
 Greater awareness of national anti-bribery
laws and non-deductibility of bribes
 Loss of reputation and damage to firm

Creating a corporate culture of
compliance
 Corporate
code of ethics
 Facilitating
reporting of illegal
activities, “whistle-blowing”
 Linking
compliance and governance:
CEO, Audit Committee, Board
Measuring the level of risk
awareness
 Content
of company codes (general
or specific references to bribery,
corruption, legal rules)
 Compliance processes
 Training of company officers
 Application to Subsidiaries
A “Disabling Environment” for
Corruption
 Legislative/regulatory
framework
(may need adjustments)
 Synergies between treaty-based
obligations and governance norms
 Recognizing “value-added” of good
governance and corporate
responsibility
 Ensure enforcement
The Great Governance Challenge
Making a positive contribution to
economic development and the
alleviation of poverty while serving
its clients and making money for its
owners.
Thank you