We are quick to point fingers at corruption in government circles but hush up similar practices in corporations
The doctor takes money to endorse, the purchase head expects something to release payments, the pharmacist wants something to stock. How can professionals in key positions earning healthy salaries indulge in such corruption?” I asked my mentor. My mentor was then the CEO of a large MNC biopharmaceutical company. I told him that I wanted to look for a job in a different industry
“If you want to make money through dubious means it doesn’t matter which role or industry you are in,” he replied. I did not believe what he said that day. But, many incidents in corporate life during the last two decades have corroborated his statement. The Punjab National Bank-Nirav Modi case is just the latest.
Organisations with large material or service procurement needs are generally vulnerable in this regard. In companies, individuals have the power to procure services or goods worth hundreds of millions of dollars. However large and reputable an organization, if it has weak control systems it tends to breed individuals who can misuse the trust placed in them. This can happen in any function and is not just limited to Administration and Procurement. It is also seen in HR, IT or Finance departments where the procurement is often direct. Even Sales, marketing, and CEOs can indulge in this if their own integrity isn’t of a high standard. People who work in large corporates do encounter incidents occasionally if not frequently.
Now, let’s not act holier than thou and say it only happens with politicians, bureaucrats, and government officials. Every marquee brand in the private sector too faces ugly episodes of individual or departmental corruptions.
Hushing it up
Just recently an MNC had to get the cops, an external lawyer, and its APAC team to the office to escort its CEO off the office premises. During his long leave, they made the discovery. A majority of sourcing at the firm came from a newly formed company co-owned by the CEO. Unfortunately, fearing reputation loss and media publicity they did not press charges. They closed the case without taking it to the logical ending. Almost all organizations take prompt action and fire the individuals when they get to know about it. But the key step they fail at is making the event public or ling a case to prevent further occurrences.
Inducements are galore! It’s not easy to detect these as many of them border on favouritism and not necessarily involve money each time. They might be holidays in exotic locations, latest iPhones, expensive watches or other electronic gadgets, which are difficult to track. However, invariably the team members of the person indulging in this corruption would most likely be aware of it. S/he would either be hand in glove or a silent party to this practice. Corruption is difficult to hide in large organizations even though many of these transactions tend to happen outside the office.
Some organizations have, in fact, banned external meetings, lunches, dinners and events with service providers. We all know this is difficult to track or implement. Then there is soft corruption where the service providers announce awards for their own customers in different categories. How can you not return the favour to somebody who gave you some nice publicity?
Many organizations have stringent norms around what we can term as corruption. They take multiple quotes from different service providers while procuring materials or services. Neutral senior role holders from the organization are roped in for key procurement decisions in order to ensure fair practices. Certain companies rotate the service providers every few years to avoid collusion. There are ombudsmen appointed by companies frequently to check wrongdoing. In spite of all these measures corruption at corporates is not uncommon.
More vigilance needed
Some professionals carry their service providers every time they move organizations. All of these needs qualified scrutiny. Organizations have to be more vigilant and bring more sophistication to track offenders who keep innovating to beat existing checks. All of us are quick to point out the corruption in politics, and public institutions. We feel entitled to lament how taxpayers’ money gets wasted by people whom we trusted to take care of them. But, is corruption only prevalent in government or public-sector institutions? Much of what happens in the private sector goes unreported by media as it is buried quietly within the organization. It’s important to reiterate that it’s just a handful of greedy individuals who might be indulging in corporate corruption.
Nevertheless, it’s important for every CEO and CFO to ensure yearly checks of their suppliers to avoid embarrassment when these break out. What would you do if you know your colleague is indulging in corruption? I mean favouring an external party and getting monetary or non-monetary benefits? Report to your senior or write anonymously to an email id provided by the organization. Many times you may not be able to prove it. Instead of quitting or silently suffering daily, find a way to maintain your integrity and stand up for the organization which pays your bills.