In the Journal of Business Compliance, which was brought to my attention via Philippe Montigny (CEO, Ethic-Intelligence) and Scott Killingsworth (Partner, Bryan Cave, and who also is on the editorial board) I read with great interest a three-part article* by Esther Pieterse and Sven Biermann titled Employees Facing Corruption. By way of background, Sven Biermann is the Director of Anti-Corruption Projects at the HUMBOLDT-VIADRINA School of Governance in Berlin/Germany and Ms. Esther Pieterse is a PhD candidate at the Europa- Universitat Viadrina Frankfurt (Oder).
Shortly thereafter, I was contacted by the Editor-in-Chief, Anthony Smith-Meyer, who asked me if I was interested in evaluating and comparing my own experience and conduct in the context of the academic theory of Pieterse-Bierman. Mr. Smith-Meyers asked if I thought there were lessons from my own experience that might be relevant to those at the front lines of international business, and to those who are tasked with helping them to manage corruption risk. Accordingly, using the Pieterse-Biermann Generic Decision Making Model (GDMM) as a companion to my own business behavior, I accepted Mr. Smith-Meyer’s challenge, as providing the potential to advance a “way forward” for corporations through further discussion, actionable “to-dos”, and perhaps to even inspire further internal research with respect to anti-bribery compliance. As I shared with Mr. Smith-Meyer, “I do not see my own story as entirely unique, (so) I hope this commentary, by detailing my own experience, might assist organizations by elevating topics that are not often discussed, or even acknowledged by some corporate executives.”
The following is a modified excerpt from my essay (with permission of the publisher), and for the entire article, I invite you to contact the publisher Baltzer Science Publishers, by linking here:
Employees Facing Corruption by Esther Pieterse and Sven Biermann
In their introduction Pieterse and Biermann (the “Authors”) state that bad behaviors and bad outcomes are “the result of bad decisions,” and that by better understanding the decision making variables which influence individuals, and how those factors interact, that the creation of an “effective anti-corruption risk mitigation strategy” will be made that much easier. Their work sets out to do this by describing “how employees make decisions and how such decisions can be influenced by targeting the underlying decision-making factors and variables.” The model they present is a Generic Decision Making Model (GDDM) and “that decisions and behavior are determined by a thought process” that is guided by:
Personal considerations, based on personal calculations of risk (detection) and reward (benefit), as well as values and self-image. The rewards issue is similarly addressed as “gain” or “hedonic” goals in the article – Combining Purpose with Profits – by Birkinshaw, Foss, Lindenberg, MIT Sloan Management Review, Spring 2014.
Societal considerations, based on the environment around the individual “including the workplace, and interaction with the expectations set by private and public circumstances in which they employee finds him/herself.”
Drilling down into each of these considerations, the Authors isolate the following with respect to personal considerations of Profitability and Attitude:
Profitability is well understood when considering “benefits” “costs” and “risk of detection,” as determinants of the ultimate decision: to participate or refrain from corruption.
Attitude. The first description of attitudes pertains to ethical values where “unethical behavior is an action that violates widely accepted (societal) norms.” Next comes emotional awareness that corruption leads to negative consequences in local economies and societies, with the conclusion that “lack of awareness can cause an employee not to recognize corruption as a moral issue at all.” Most importantly, The Authors recognize that attitudes can change, especially “when an employee with a current strong disapproval of unethical behavior is exposed to an environment where corruption is an accepted societal norm for a longer period of time.” Indeed. some might call this as “going local.”
Now, to “The Decision.”
The Authors state that when an employee “decides to engage in corruption” that on balance, “personal and societal considerations have steered to the conclusion that the benefit gained from corruption…provides a greater inducement than when refraining from corruption.” As the Authors later declare, “approval of corruption implies that employees find corrupt behavior to be in accordance with social norms,” and that approval “may also result from a lack of awareness of the negative consequences that corruption has for third parties.” Simple, but sadly, true.
In choosing between participating or refraining from corruption, the Authors explain the complex and inconsistent ways employees consider the rights and wrongs of a decision. Furthermore, as one considers the choices, employees use “rationalization strategies (consciously or unconsciously),” as such strategies “enable the justification of generally disapproved behavior by finding moral excuses that segregate a decision from the generally held principles of the individual.” The Authors break down rationalizations into a number of components, including the trivialization of consequences, and the reference to corruption as victimless, among others. They also once again point to pressures to behave corruptly such as demands “to deliver ill-considered, unrealistic financial or other results.”
What now follows is a reflection of my own experience against what I consider to be a valid academic paradigm as summarized by the GDMM.
Engulfed by The Perfect Storm
As to the framework of the Authors, I agree with almost all of their points, components and variables. In the article, I share from my own experience that the temptations or “tipping points” as they describe in their “corruption propensities,” can be potentially overwhelming in favor of corruption to those at the front line of international business. While their model is the GDMM, mine is “the perfect storm,” and is based on four elements:
In the Business Compliance article I address each one, as well as in individual posts on this blog (as linked above.) Nonetheless, each one of those elements was a significant “ingredient” in my ultimate decision to engage in corrupt behavior, and which I describe in great detail. Furthermore, as I share my own experiences and perspectives, I make no attempt to justify such conduct, even as I explain how I rationalized unethical behaviors and decisions. I simply reflect upon my own experience, as these are the emotions, temptations and behaviors that I seldom read about in the compliance debates or witness at compliance symposiums.
Addressing underlying behavior trumps detection
Given the isolated and secretive environments in which corrupt discussions take place, often in “wink and nod” terms, detection remains difficult. The Authors propose a set of policy options including internal controls, audit measures and communication channels to encourage good faith reporting. While all of those measures are helpful to contain the consequences of corruption by removing the financial tools of bribery available to field personnel (and which have been extensively and appropriately covered by such professionals), they don’t necessarily address the underlying behaviors and assumptions prior to the corrupt conversation. As the Authors state, by addressing and discarding the illusion that bribery can be a “win-win” for the payer and payee, small bribe or large, corporations can “create an awareness of corruption as an ethical issue,” and create a “moral self-governance” among international business teams. Thus, if a company can be proactive in fostering an ethical abhorrence to corruption, through an understanding of the societal consequences of bribery, then those desired behaviors will bring better long term results than a book of “rules and procedures.” While policies and process are necessary and appropriate, without addressing the thought process which leads to corrupt behaviors, such rules might viewed as nothing more than a set of “work arounds” at the front lines of international business, especially in high-risk areas.
However, such a change of attitude is not going to be created through watching training videos, reading anti-bribery paperwork, signing stacks of affidavits, or even by subscribing to anti-corruption news feeds (present company included); it needs to be more dramatic and impactful.
Compliance programs need to address incentives (benefits), clarity of sanctions (costs) and highlight controls (detection), but most importantly, be supported by a long term platform which addresses organizational, personal and societal attitudes concerning the tragic consequences of corruption. From my experience and perspective, by ignoring any of those variables, a company puts themselves, as well as their personnel, in great peril. This is not a menu whereby some but not all can be selected. Enforcement agencies have already