Anti-Bribery Compliance: Good for business and good for society

Anti-Bribery Compliance: Good for business and good for society

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March 21, 2017

What would make you happier? More money? Better healthcare? A reduction in corruption? The latter is not the answer that would spring to most people’s minds, but data suggests that a country with high levels of bribery risk may have lower levels of happiness.

The 2016 TRACE Matrix is a publicly available tool designed for compliance professionals to assess the risk of being asked for a bribe by a public official in 199 countries. Comparing the Matrix rankings to the data from the 2016 World Happiness Report shows a moderate but clear correlation.

It is already fairly well accepted that corporate bribery is bad for business. While it may offer short term gains, the long term consequences can be dire for a company’s reputation, culture and ability to attract top quality employees—not to mention the legal and financial repercussions if a company is prosecuted under the Foreign Corrupt Practices Act or other international anti-bribery legislation. Bribery leads to a lack of trust and an uncertain environment within a company.

As in business, so in society. While correlation between the Matrix and the World Happiness Report does not prove causation, the four main domains that contribute to the TRACE Matrix rankings—Business Interactions with the Government, Anti-Bribery Laws and Enforcement, Government and Civil Service Transparency, and Capacity for Civil Society Oversight—may shed some light on why the correlation exists.

High scores for a country across the four domains indicates a set of societal conditions that allow corruption, bribery and unpredictability to thrive. The consequences of bribery in society are far-reaching. Bribes undermine safety and security when customs officials and building inspectors can be bought. Bribes impair development when officials take kickbacks from projects meant to benefit the public. In such an environment it is likely that the population will report lower levels of happiness.

By training, monitoring and supervising employees to recognize and refuse requests for bribes, not only can companies work toward a culture of compliance in their own organization, but over time there is the potential for norms in countries with a high bribery risk and low levels of happiness to change. If companies refuse to pay bribes to public officials often enough, public officials may learn not to ask. As bribery risk decreases, we may see an uptick in happiness. 

FOR MORE ON THIS TOPIC, PLEASE SEE THE FOLLOWING RESOURCES:

The TRACE Matrix
World Happiness Report 2017
Bribery Is Bad... For Business

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