How Compliance Trumps Corruption in Revenue Growth
By Russ Warner, VP Marketing & Operations –
While corrupt practices lead to short-term financial benefits, companies that implement ethics and compliance policies enjoy more benefits in the long run.
What does it take to grow a business? A successful business usually requires a sound business model, hard-working employees, long hours and a “can-do” attitude. Of course, some companies prefer to take a different route, using bribery to fast track their success and acquire opportunities that would have otherwise been unattainable. While corruption studies indicate the popularity of this path for businesses worldwide, new studies indicate that strong compliance ethics lead to strong revenue growth.
Ernest & Young recently conducted a corruption survey of large businesses across 38 countries. Of the 3,800 employees surveyed, 40 percent said their company reports higher success than is justified by their actual financial performance. And 61 percent of the group noted bribery and corruption as widespread elements in their rapid-growth markets. These stats are hardly surprising when you consider the following: 42 percent of respondents said their company does not have an anti-corruption policy; 25 percent said their business does not have a whistle-blowing hotline; and only about 50 percent say their top management executives understand the business environment in local markets. Thus we can see a prevailing culture of corruption in the businesses surveyed.
Patience is a Virtue
It’s interesting to note that the companies that reported strong revenue growth also reported having effective compliance programs. The employees working for these ethical companies were twice as likely to rate their company’s ethical standards as “very good” and to say that operations in different countries met the same ethical standards. These companies were also found to have clear penalties for breaching compliance policies.
So, it seems like employees have to make a choice — are they willing to risk the consequences of corruption to get money quickly, or are they willing to patiently wait for the revenue that will come their way by embracing cultures of compliance and honesty?
Communication is Key in Fostering Integrity
What keeps a company from embracing integrity? One problem could be a lack of communication. Of senior management respondents, 44 percent said they frequently communicate the importance of ethics, while only 30 percent of their employees agreed in the survey. In addition, 25 percent of these employees said they had never heard a manager discuss the importance of ethics. This lack of communication creates an environment of confusion. Employees need clarity on acceptable methods for obtaining results.
If top managers wish to create a long-term vision of ethics coupled with high revenues, they must clearly communicate and enforce their stance on ethical behavior. When a culture of integrity is implemented and modeled by top management, then the employee base will understand what behaviors are expected and appropriate.
When fostering a culture of integrity, companies can use tools like EyeDetect® to help in the process. EyeDetect, the newest player in the lie detection market, can screen people for involvement in corrupt practices with 85% accuracy. By implementing EyeDetect screening, business will see their ethics — and revenues — improve dramatically.
