Corruption is the single greatest obstacle to economic and social development around the world. With over US $1 trillion paid in bribes each year, the magnitude of value lost is comparable to the GDP of the entire African continent. Companies have the potential to close the tap on bribe money, putting an end to the days of bribery as a business strategy. The cost is simply too great.

Corruption involves a variety of stakeholders and takes on different forms in different places. Corruption adjusts to a company or a country climate. What can be observed in one business environment will not necessarily be easily identified in another. Though challenging, fighting corruption must be at the top of the agenda for business. The need for effective solutions is evident.

Siemens is at the center of a very serious bribery scandal, with company managers being investigated in a bid to clarify questionable payments totaling some €1.3 billion. We are in the process of accounting for the past, while shaping the present and facing the challenges of the future. We will show that we are moving in the right direction and that compliance is not an option, but a principle that manifests itself right at the heart of Siemens.

Collective action enables companies to collaborate with industry peers and stakeholders to create markets where decisions are driven by economic considerations and not influenced by corruption. By working collectively, companies can help level the playing field between competitors, improve the quality of legal and regulatory systems, create incentives to avoid bribery among individuals and organizations, and introduce greater transparency and predictability to business transactions in corruption-prone countries and sectors.

It is generally believed that emerging and developing markets pose a greater corruption risk due to weaker regulation and a number of other factors. Organizations must assess corruption risks attached to such ventures and implement effective mitigation measures. The assessment must consider that the organization’s own approach to corporate governance may pose as big a corruption risk as the perceived exposures within the targeted market.

Reporting on actions to counter corruption presents challenges, but is critical. It supports deeper integration of anti-corruption measures into business operations by establishing an external accountability mechanism and can stimulate companies to improve systems. There are a growing range of tools and initiatives to assist companies in implementation of anti-corruption programmes and a range of standardized indicators are being formulated to further assist.

An overview of new anti-corruption resources including, "Clean Business is Good Business" and "Fighting Corruption through Collective Action".

There are many verdicts on the state of globalization. Who is winning? Who is losing? Most importantly, can it endure? Harvard Business School Professor Rawi Abdelal spoke with the Compact Quarterly about the need for the benefits, costs and risks of market integration to be distributed more fairly if the “project of global capitalism” is to be sustained. According to Abdelal, “We’ve seen globalization before, and it failed. It failed in part because there was an increasing legitimacy crisis for it within national societies. And, I think that failure took the business community largely by surprise.”

An overview of key concepts related to the Global Compact’s ten principles and suggestions for practical steps to implement these principles into a company’s strategy, operations and culture.

Read about Local Network activities around the world, including Global Compact Clinics in Albania; Secretary-General visits in Japan, China and South Korea; launches in Greece and Namibia; Human Rights focus in the United States; and much more.