AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn,...
-
Upload
reginald-austin -
Category
Documents
-
view
217 -
download
0
description
Transcript of AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn,...
![Page 1: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/1.jpg)
AARHUSUNIVERSITETAU
Lars Johannsen“Reducing Corruption: Focusing on private sector”
Tallinn, Estonia
February, 11. 2016
1
Don’t step on the tail of the tiger: managers reaction to private-to-private corruption
![Page 2: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/2.jpg)
ClaimsCorruption: The difference between Denmark and Estonia is a matter of
degree! Common but not accepted
It is important to detect and to get the information about wrongdoing to
management as quickly as possible. Preference for the ‘in-house’ solutions
2
![Page 3: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/3.jpg)
ClaimsDanish and Estonian managers all believe in the
personal example…but Danes are more in favor awareness and
ethical training… and Estonians are more inclined to use
punishment and reward…but if corruption threatens the personal
interests of the manager ? … well … don’t step on the tail of a tiger!For debate: does one-size-fit-all or not?
3
![Page 4: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/4.jpg)
Estonia and Denmark comparedEstonia Denmark
Corruption in public sector
Middle position (TI) Almost corruption free (TI)
Economy Emerging open European economy
Mature open European economy
Private Sector SME (smaller) SME (larger) plus multinationals
Value system Christian/atheist/-Soviet
Christian/atheist
… But corruption – a difference in degree!
4
![Page 5: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/5.jpg)
How common?Encounters: Having encountered at least one of
four types of corruption
5
![Page 6: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/6.jpg)
Types of corruption encountered
6
![Page 7: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/7.jpg)
Corruption is not acceptable
7
![Page 8: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/8.jpg)
The costs of corruption
8
Company's reputation Financial loss Manager's career Loss of business network0
10
20
30
40
50
60
70
80
90
100
54.9
47.4
38.534.5
69.7
53.3
63.8
39.7
Estonia Denmark
![Page 9: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/9.jpg)
Getting to know about it and quicklyWhistleblowing and management review Getting to know about it quickly –
the internal process
• Studies show that cases discovered through internal measures come more quickly to the management attention
-> reduces the potential loss -> increases possibility to repair any damage that the case might to the reputation of the company
• Tipping management is most common detection method. Other studies show that 40 percent of all cases are discovered through tips.
• In comparison about 30 percent are discovered though management review and internal audit.
9
![Page 10: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/10.jpg)
Estonian and Danish managers all prefer internal reporting but more Danes think that reporting to
outside agencies may also be an option.
10
Estonia Denmarkrank %
highly agrees
rank % highly agrees
… tell the management or other members of the board
1 92.3 1 89.4
… talk with that colleague 2 48.1 2 42.7… talk with other colleagues 3 45.1 3 55.2… talk at home/with friends (not colleagues) 4 19.4 4 55.2
… go to the police 5 15.8 5 49.6… contact an anonymous hotline 6 8.3 6 26.4... do nothing 7 3.0 7 10.9… go to the press 8 1.5 8 4.9
![Page 11: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/11.jpg)
What to do?
11
![Page 12: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/12.jpg)
Estonia Denmarkrank % highly
agrees rank % highly
agrees
Positive personal example by top managers 1 92.9 1 93.3
Develop internal control system 2 85.8 3 86.5
Punish wrongdoers by terminating employment contracts
3 84.7 2 87.2
Punish wrongdoers by decreasing salary, demotion etc.
4 57.6 8 48.4
General ethics training to all employees 5 50.4 6 67.8
Declaration of (financial) interests 6 45.2 7 56.8
Adoption of code of ethics and/or instructions 7 41.8 4 86.3
Raising salaries 8 38.5 11 28.1
Nomination of a trustee with the company 9 27.8 9 41.1
Reporting to law enforcement (police, prosecutor) 10 27.2 5 71.8
Setting up of an anonymous hotline 11 13.2 10 35.8
12
![Page 13: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/13.jpg)
Are Estonians and Danes really that different?
Don’t step on the tail of the tiger
13
![Page 14: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/14.jpg)
Effective prevention methodsEthics & personnel Control and
managementSalary and demotions
Country Danes + Estonians +
Costs of corruption(Four types)
Firm reputation Managers career +Firm financial +
Type of corruption(Four types)
Kickback -
Age +
Gender
14
![Page 15: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/15.jpg)
Does one-size-fit-all or not?
Private-to-private corruption is a global phenomenon.
The importance of getting the information to the managementDetection – costs
Whistleblowing – internal and external
… but ….
15
![Page 16: AARHUS UNIVERSITET AU Lars Johannsen Reducing Corruption: Focusing on private sector Tallinn, Estonia February, 11. 2016 1 Dont step on the tail of.](https://reader036.fdocuments.net/reader036/viewer/2022062413/5a4d1b6b7f8b9ab0599b3394/html5/thumbnails/16.jpg)
Trust is cheaper than control – and more fun
16