How Global Businesses Can Root Out Corruption And Unlock Growth In The Developing World

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Corruption is insidious. If you give it an inch, it will take a mile.

If you don’t root out corruption at the core, it will pollute an organisation from the inside. And as we head forward into an increasingly globalised business world, we simply cannot afford to step over it.

The OECD predicts that by 2060, the GDP of the developing world will surpass that of the developed. In order to capitalise on the opportunities that come from this inevitable growth, global businesses must form strong collaborative partnerships with the developing world.

But where there are loose regulatory frameworks and a lack of enforcement, corruption thrives. Worse still, it can become normalised and accepted.

So how should global businesses deal with the dilemma of doing business in environments rife with unethical behaviour?

In my opinion, you can boil it down to seven points that companies need to understand and get absolutely right.

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1. Immersion

After years spent working as a fly in fly out manager in developing world countries, I soon realised an important truth: Corruption cannot be dealt with in short bursts. It requires presence and persistence.

It was only after I actually lived in the local country – when I had a social security number, a home, and my family with me – that I truly understood the dynamics of the local culture, the company and the people.

I saw lifestyles that far exceeded salaries. I heard revealing gossip and gained valuable insights that I would never have heard had I been packing my bags and jumping on a plane back to Denmark every few weeks.

Corruption leaves clues, and only through immersion do we begin to notice them.

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2. Local trust

This immersion is key to gaining the all-important trust of the local team.

Fighting corruption requires the support and trust of the whole organisation and its partners, not just a spoken mandate from head office.

Understanding the local market helps you to develop different relationships with the team, which assists in building the trust required to take firm action against corruption.

But, in order to be effective, that local knowledge must be accompanied by an intimate knowledge of all aspects of your business. Only when you understand the business inside out do you stand a chance of identifying the corruption that hides in plain sight.

From paying too much to suppliers, to kickbacks cloaked in legitimate looking payments – local knowledge combined with deep understanding of the business itself are the foundations for spotting corruption when doing business in emerging markets.

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3. Zero tolerance

Identifying corruption is only part of the story. The real challenge is taking action – and being prepared to deal with the consequences.

Years ago I was in the middle of dismissing staff for corruption. It was a tough, but necessary, decision, and like most tough decisions it had far reaching consequences.

In one memorable conversation, I was talking to our lawyer. As we discussed the implications of my decision he shared with me an ominous piece of information about the low cost of a hitman in the country we were in.

Where corruption lives, so will fear. We cannot let fear win. If we give into these threats, they will continue. Which is why the only way to deal with corruption is zero tolerance.

Only with a firm stance can corruption be rooted out. Sometimes this may include removing people who weren’t directly involved, but implicated by association.

Though such a decision is never easy, it sends a clear message throughout the organisation – speak out or get out.

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4. Talk openly about it

It may be tempting to step over actions like these, but failing to talk about the sad examples can lead to destructive gossip and toxic chatter.

Instead, any time corruption is confronted and removed, it’s important to communicate openly and honestly with the team about the reasons for it.

We cannot shy away from talking about corruption. Because if the organisation cannot talk openly, how can the team be expected to? 

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5. Led by the board, embraced by everyone

Such a committed agenda must be led by the board and embraced by the entire organisation. It’s not enough to just talk about it – it must be lived. Because enforcing our values takes time, effort and energy. It requires constant education, discussion and, importantly, action.

But only when we are prepared to enforce our values – both within our organisation and with the partners we choose – do we show we have the conviction necessary to root out corruption.

And rooting out corruption is crucial if we are to capitalise on the opportunities for partnership with the developing world.

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6. Develop partnerships

Global business is no longer a case of us and them.

As developing markets continue to mature, it’s more important than ever to shift mindset from transactional to partnership.

This might mean reducing the number of suppliers and vendors. Because you cannot develop strong partnerships with everyone.

You can only do that with a certain amount of companies with whom you can then establish a long-term relationship based on shared values and policies, and on mutual trust.

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7. Focus on the values

Values are not something fluffy. Values guide our behaviour and inform our decisions when we don’t know what to do.

In times of uncertainty or of something new, values are instrumental. I firmly believe that values are the key to unlocking the potential sustainable growth in the developing world.

Only when we have an alignment of values with our partners can we generate the trust necessary to become an empowering ally. One that supports and collaborates with its partners, in an environment free of corruption.

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So, these were my main points on how businesses can overcome corruption. It won’t be easy. In fact, it won’t be anywhere near easy.

The conclusion? That partnerships and strong values are the goals we must strive for as global businesses operating in the fast developing world. They will help overcome corruption, and they will help unlock growth and opportunity – for everyone involved.

But such partnerships cannot thrive without trust. And trust is a delicate matter. Where corruption lives, trust cannot.

Which is why corruption simply must be removed. It is the anchor that pulls us down as we try and power forward.

If global businesses are to capitalise on the abundant opportunities in the developing world, they must be prepared to enforce their values with a zero tolerance approach.

Not only is it the right thing to do ethically, but commercially as well.

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Asger S. Lauritsen is the Chief Procurement Officer at FLSmidth. Follow him on Twitter here.

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