Legal and Policy Measures in the Private Sector

Topic: Can companies reform their internal governance structures to reduce corruption risk?

Outline:

A growing concern on corruption in corporations has led to the defining and addressing of corruption in private context rather than defining corruption in traditional public contexts (Breit, et al., 2015). This has also led to the legal and policy measures on corruption in the corporate sector (Rothstein, 2011). In the UK, one of the steps in this regard is the development of external measures like the Bribery Act 2010, which penalises actions of corruption within the corporate sector.

However, there is also concern that external institutions like the Bribery Act 2010 only have limited impact on curbing corporate corruption and that there is a need to develop internal governance structures that help to establish strong corporate governance within the corporations. This essay discusses how there can be development of business ethics within the internal corporate governance structure as an anti-corruption tool. The essay discusses the law related to punishment of companies for bribery and corruption and considers whether internal structures can help to reduce the corruption risk by the companies.

The essay will first discuss the legal provisions for anti bribery by companies. In particular, Section 7 of the Bribery Act 2010 makes it an offence for companies for failing to prevent associated persons from committing bribery on their behalf. Companies may be allowed to defend themselves if they can establish that they have put adequate procedures in place to prevent bribing by associated persons (Ministry of Justice, 2011). The Guidance under the Bribery Act 2010 provides the measures that can be undertaken to prevent associated persons from bribing (Ministry of Justice, 2011). This essay is based on the premise that the strengthening of the internal governance structures by companies can allow them to create better regimes within the company to prevent associated persons from bribery related offences.

The substantive part of this essay will discuss the development of an additional perspective of strengthening business ethics and making them central to the internal structure based on the premise that the development of an anti-corruption internal governance structure is not only a legal requirement but also an ethical one. This is based on the Guiding principles under the Bribery Act 2010, (Principle 2) which provides the responsibility of promoting ethics and a top down organisational culture for anti-bribery (Ministry of Justice, 2011).

The principal task of this essay is to discuss the development of an additional perspective of business ethics to be included in the internal corporate governance structure for strengthening it as an anti-corruption tool. In this regard, business ethics govern individuals’ behaviour in organisations for aligning it to ethics, law and regulations of democratic governance (Sullivan, 2009). In addition to the legal framework on the anti bribery measures, it is also pertinent to develop the organisational moral compass reflected in the organisational decision making, which helps the organisation to strengthen its anti corruption structures (Sullivan, 2009).

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Bibliography

Breit, E., Lennerfors, T. T. & Olaison, L., 2015. Critiquing corruption: A turn to theory. Ephemera: Theory and Politics in Organization, 15(2), pp. 319-336.

Ministry of Justice, 2011. The Bribery Act 2010 - Guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing (section 9 of the Bribery Act 2010), London: Ministry of Justice.

Rothstein, B., 2011. Anti-corruption: the indirect ‘big bang’approach. Review of International Political Economy, 18(2), pp. 228-250.

Sullivan, J. D., 2009. The Moral Compass of Companies: Business Ethics and Corporate Governance as Anti-Corruption Tools, s.l.: International Finance Corporation.