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Blog : BOARD TALK

Relaxing Laws On Bribery Makes A Mockery of #corpgov

Posted on May 31, 2013 at 9:15 AM

I was dumbstruck by the FT story two days ago that the UK government is considering 'relaxing' the Bribery Act legislation which took long enough to get approved in the first place. If you don't have access to FT.com it quoted the Confederation of British Industry (CBI), the UK's top business lobbying organisation, as supportive of this move.


 

"Jim Bligh, head of public services at the CBI, said a few companies had given up multimillion pound deals because of their fear of the act, which can leave companies with unlimited fines and individuals facing up to 10 years in prison.


He said legal guidance and even the primary legislation might need to be changed because it was hindering 'British competitiveness'. “'If you’re a small company doing business for the first time in a new market, this is a significant block on your ability to land a contract'” he said".


This strikes me as a seriously flawed argument. It's like locking up all the malaria nets and not handing them out in the middle of an epidemic. You simply can't go on about corporate governance and standards in British business - upheld for many reasons, including the sure-fire draw of the right sort of investment in the country - and then throw away the tools designed to achieve that end.


Ernst & Young's recent EMEIA fraud survey found there to be serious problems in businesses just about everywhere, when it comes to unethical behaviour. From 'facilitation payments' to looking the other way while setting impossible targets and expecting managers to meet tem, it is a real indictment of endemic business practices.


You only have to read the comments on forums on social networks such as LinkedIn on the issue of bribery and corruption all the way to the boardroom to realise that everyone working in business is aware of these issues - though not everyone wants to talk about it. By even considering a relaxation of the existing legislation, the UK government is in serious danger of shooting itself in the foot, not once, but a dozen times.


If the problem with the Bribery Act is that people don't understand its scope and there is a lack of awareness at SMEs on how they could be caught within its net - which then inhibits the opportunities available to them - then for God's sake educate them. 


It also looks suspiciously as if the people lobbying the most for the legislation to be 'relaxed' are the ones who don't give a fig about the ethical stance behind them.


Legislation designed to change behaviour without ensuring that people understand the legislation makes a nonsense out of the fundamental basis of the UK's corporate governance code: 'comply or explain'. You can't comply if you don't understand and you definitely don't want to explain.


How can we possibly aspire to  a behaviour-based, rather than a rules-based system  in the middle of such nonsense?

 


Categories: Compliance, Communication, Engagement