It is really difficult to justify the economic arguments of fight against corruption in the countries where Bribery and other ways of manifesting corruption are widespread. However the companies with strategic thinking understand the need for honesty and adherence to ethical principles as the most important aspect of risk management and entrepreneurial practice. In emerging markets, the medium-sized businesses report that one of the benefits of introducing anti-corruption programs in addition to reducing risks that are directly associated with criminal prosecution but also gaining confidence.
Anti-Corruption Compliance is Important to Medium-sized Enterprises. Anticorruption compliance means the transfer of global anti-corruption principles and standards as well as national laws to local practice as every country in the world has national legislation envisaging criminal liability for corruption.
Medium companies can have significant benefits from anti-corruption compliance and, respectively, can lose much if they are unable to prevent corruption.
|
The Business Rationales for Fighting Corruption |
|
| · Qualify for reduced legal sanctions in jurisdictions like the US and Italy | · Criminal prosecution, in some jurisdictions both at company and senior management levels which can lead to imprisonment |
| · Reduce the cost of doing business | · Exclusion from bidding processes, e.g. for international finance institutions and export credit agencies |
| · Attract investments from ethically oriented investors | · “Casino risk” – no legal remedies if a counterpart does not deliver as agreed and/or keeps increasing the price for doing so |
| · Attract and retain highly principled employees, improving employee morale | · Damage to reputation, brand and share price |
| · Obtain a competitive advantage of becoming the preferred choice of ethically concerned customers/consumers | · Tougher fight for talent when hiring new employees |
|
Notably, there is already a Draft Criminal Code of the Republic of Armenia, which provides for criminal liability for legal entities. In parallel, it is envisaged that such liability will be avoided if legal persons have taken appropriate measures and this may be the basis for implementation of the anti-corruption compliance program. |
· Regulatory censure
|
|
· Cost of corrective action and possible fines |
|
Sourse՝ The Business Case against Corruption – a joint publication by the International Chamber of Commerce, Transparency International, UN Global Compact, and PACI.
This material has been prepared in the scope of the “Armenia: Promoting Anti-Corruption Conduct and Reforms” Project implemented by the “Center for International Private Enterprise”, the “Armenian Lawyers’ Association” NGO, the “Corporate Governance Center” NGO and the “Yerevan Chamber of Commerce and Industry” with financial support of the National Endowment for Democracy. The project is implemented as a co-financing to the “Commitment to Constructive Dialogue” action implemented with the financial support of the European Union by a Consortium comprising the “Armenian Lawyers’ Association” NGO, the “Armenian Center for Democratic Education-CIVITAS” NGO, the “International Center for Human Development” NGO, the “SME Cooperation Association” NGO, the Union of Communities of Armenia, as well as “Agora Central Europe” NGO (Czech Republic). The contents of this material are the sole responsibility of the “Armenian Lawyers’ Association” NGO and can in no way be taken to reflect the views of the National Endowment for Democracy and the European Union.
