TI, 21 February 2008 – How business can fight against corruption

Reports about bribery scandals involving large trans-national corporations are in the news almost every day. But bribery is an even more problematic issue for small and medium enterprises which carry out most of the world’s business today.

SMEs may feel powerless in the face of demands for bribes and are often unaware that bribery can be resisted or how to go about it. But not only is it possible for SMEs to counter bribery but it is good business practice. Transparency International has developed a new tool that can help SMEs to take a first step to resist bribery and to develop an anti-bribery programme – the Business Principles for Countering Bribery, SME edition.

Large corporations have learnt to manage the changing norms and environment and increasing numbers have systems in place to resist and counter bribery. But SMEs often lack the financial and human resources to do this and consider themselves defenceless in the face of corrupt demands and extortion.

Pressure on SMEs is also mounting from larger companies which are increasingly expecting their suppliers to show evidence that they have anti-bribery policies and processes in place. The consequences for SMEs are that contracts are not awarded on commercial merits but on bribes paid.

If they then feel compelled to pay bribes or meet extortion demands it imposes extra costs on their businesses. Not only is it possible for SMEs to counter bribery but it is necessary as smaller companies are bound by the same legal obligations and responsibilities as larger firms.

Countering bribery is also good business practice. It can help build reputation, especially with customers; it can reduce risks and foster a positive and ethical culture for a company’s own employees. By building strong anti-bribery cultures SMEs can successfully challenge and resist bribery.