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How to minimise the risk of corruption
01 Mar 2017A good reputation can be lost in an instant.
After a recent high profile corruption case hit the headlines in New Zealand, you might be wondering if it could happen in your organisation. How would you know? What can you do about it?
A company’s culture is a good place to start. A culture of "doing the right thing" and having values centred around integrity are all very well and good, but these are little more than words unless underpinned with some simple yet practical tactics:
1 Enable whistleblowers to act
Many of these events are detected via whistleblowing. So encourage a culture where this is seen as a positive action, but also provide a real, independent channel where people can raise a concern, secure in the knowledge that information will be received and used fairly and dispassionately.
2 Systematically identify where fraud could occur as part of a risk management programme
Understanding where and when your organisation is exposed to the risk of fraud or corruption allows the implementation of appropriate controls; this ensures a consistent understanding of what’s acceptable (ie, when does “helping out a mate” become corruption?) to drive a consistent culture of integrity.
3 Look out for the less obvious
You can be forgiven for thinking that here in New Zealand with our famous "two degrees of separation", corruption can often be less obvious and therefore harder to manage. However, simple measures include conflict of interest management, which exists in many organisations but sadly is often not managed with the rigour that keeps organisations safe. The proactive organisations that we work with have procurement strategies in place which involve:
- making sure all staff members are educated on how to manage relationships with vendors
- reviewing their practices and processes on how vendors are engaged and set up in their systems
- reviewing their inventory management practices.
If you’re concerned about the presence of corruption and risk in your business, best practice and advice will not only give you peace of mind – your organisation will also benefit from better efficiencies that lift profits. If you haven’t done so already, the time to act is now.
