In what is possibly the strangest and ugliest election cycle in American history, “what if” articles abound.

For those of us working in the field of compliance and good governance, there is concern about what lies ahead for anti-bribery efforts and the hard-fought improvements we’ve seen so far this century.

Is anti-bribery legislation putting American businesses at a disadvantage?

Donald Trump has publicly aired his thoughts on anti-bribery laws. On May 15, 2012, shortly after news of Walmart’s problems in Mexico broke, Trump made three statements as part of a rant during an interview on CNBC:

“Mexico’s a mess and this country [the U.S.] is absolutely crazy. They [the U.S.] prosecute people for going over to China and Mexico and other countries and getting business…”

Every other country is doing it and we’re not allowed to—it puts us at a huge disadvantage.

“Let them clean up their own act, we shouldn’t be cleaning up their act for them.”

No country is free of corruption—just as no country is free of other forms of crime—but it is absurd to suggest that companies in every other country are given a free pass.

It’s true that “we’re not allowed to”, but the United Nations Convention against Corruption requires every member state to criminalize bribery. It therefore isn’t correct to suggest that everyone but the U.S. is engaging in bribery.

According to the TRACE Matrix—a tool that measures business bribery risk in all countries across four separate domains—the U.S. is ranked 10^th out of 197 countries. To clarify, that means there are nine countries, including Canada and Japan, less corrupt than the United States.

Suggesting that the U.S. is alone in combatting bribery is both smug and incorrect. It undermines the leadership role taken on by the U.S. on this important issue.

Trump also indicates that American companies are put at a “huge disadvantage” by the American anti-bribery law, the Foreign Corrupt Practices Act (FCPA). The facts do not bear this out.

Corruption is expensive and bad for business

Eight of the ten most expensive actions pursued by American enforcement authorities were directed at companies from other countries. European companies determined to use bribery as a misguided marketing strategy have more cause for complaint than American companies have.

• Siemens AG (Germany): $800 million
• Alstom SA (France): $772 million
• Kellogg Brown & Root LLC / KBR Inc. / Halliburton Company (U.S.): $579 million
• BAE Systems plc (UK): $400 million
• Total SA (France): $398.2 million
• VimpelCom Limited (Netherlands): $397.6 million
• Alcoa World Alumina LLC (U.S.): $384 million
• Snamprogetti Netherlands B.V. / ENI S.p.A (Netherlands & Italy): $365 million
• Technip SA (France): $338 million
• JGC Corporation (Japan): $218.8 million

Trump appears to equate anti-bribery with anti-business, but most well-governed companies recognize that bribery is a terrible idea. Siemens’ former General Counsel, Peter Solmssen, has said repeatedly that:

If Siemens had spent the same amount on research and development that they spent on bribes, they would have had a viable product.

Not only have these cases not put American companies at a disadvantage with respect to the international business community, but these ten companies alone have added more than $4.6 billion to American coffers.

A prohibition on bribes only places companies who can’t sell by legitimate means at a disadvantage. If the company has a good product available at a competitive price, it doesn’t want to bribe buyers and it doesn’t want competitors doing so.

Marketing without recourse to bribes is more attractive to the business community. Only companies with inferior products or inflated prices need to rely on paying off decision makers.

From a business perspective, transparent dealings are preferable in every way. They are less expensive; bribes cost money which, as illegal payments, can’t be written off as business expenses.

They are more predictable; bribe-tainted contracts are unenforceable, and companies can’t sue corrupt government officials who change the terms of the deal partway through.

And they are less risky; even if the U.S. wasn’t prosecuting bribery internationally, other jurisdictions are, and several of these have the death penalty for bribery.

Private corruption steals public dollars

Even if there were some measurable disadvantages for companies that reject bribery as a way of doing business, most reputable companies recognize that the corrosive nature of corruption runs counter to the image they want to project.

Bribery prevents the citizens of corrupt countries from getting the full benefit of public dollars spent on everything from major infrastructure to routine public services.

A visibly corrupt government undermines confidence in public institutions. Paying off the decision makers to win contracts, regardless of quality or price, is not a strategy that any responsible government condones. Like restrictions on competition, dumping toxins, or using trafficked labor, any short-term financial advantage is outweighed by longstanding principles of good governance.

Trump also mocked the idea that the U.S. should have to clean up other countries, stating that corrupt nations should have to clean themselves up instead.

While this comports with the “it isn’t fair” theme he often returns to, that’s not really the point. When a head of state has his arms in a country’s coffers right up to his elbows, who exactly will be leading the charge to clean that country up?

When the poorest in the kleptocratic nations are unable to meet their basic needs, often in spite of great national natural resource wealth, it is unreasonable to expect them to take on their corrupt leaders, corrupt military, and corrupt police.

For the same reasons that we don’t imagine people living under dictatorial siege should be told to “clean up their own act”, people under financial siege by their leadership shouldn’t be left responsible either.

U.S. leadership in anti-corruption could be a thing of the past

The U.S. and its allies can be a force for good. They aren’t always, certainly, but they can be.

The U.S. has traditionally been willing to take on a leadership role in international anti-bribery initiatives. In 1977, the U.S. Foreign Corrupt Practices Act was signed into law by President Jimmy Carter.

In 2006, President George W. Bush unveiled his “National Strategy to Internationalize Efforts Against Kleptocracy.” Former Secretary of State Hillary Clinton has spoken repeatedly about the importance of anti-corruption efforts.

On International Anticorruption Day in 2011, she made the observation that:

People around the world are showing that they will not accept the corruption that prevents too many from living with dignity and having opportunities to realize their potential.

Her stance reflected President Obama’s own determination to keep global anti-bribery efforts at center stage. As Obama put it during his speech in Ghana on his first trip to Africa, “No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery.”

Bribery is a problem that crosses borders and needs a coordinated global response. Without cooperation, the bribe-takers can shake down multinationals with impunity and play an elaborate shell game with their hoard.

Unfortunately, Trump has shown little interest in international cooperation. He has called NATO “obsolete” and has been almost as dismissive of the United Nations. He appears to place no value at all on the soft power that has been critical to the success of global anti-bribery efforts over the last two decades.

What would a Trump presidency mean for anti-bribery efforts?

We should expect a relaxing of anti-bribery laws under the guise of a defective pro-business message, and for the scrupulously cultivated partnerships that produced the OECD, UN and other anti-bribery conventions to be cast aside flippantly, possibly irreparably.

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Detailed compliance policies help keep companies on the right side of the law.

But this needs to be balanced with an understanding that no policy can ever contemplate every possible risk. They need to proscribe behavior that is not permitted, while recognizing that few decisions fall on one side or the other of a bright line.

Employees should know more than just “why” compliance is important. They should know who presents risks of improper payments (like government officials), what kinds of requests are inappropriate, where the company faces the most risk, when to involve others in a transaction and how to decline an improper request.

That requires a compliance program that provides practical information that is relevant to employees in an interesting and engaging way. It’s a challenging process, but it can be done.

Here are some strategies to develop a compliance program that does more than simply reiterate the rules:

1) Create cascading compliance

Management tone is crucial to the success of a compliance program, but it is not enough for the C-Suite to tell employees that compliance is important. Top-level executives should communicate with employees about the company’s values, why compliance is important and that the company is prepared to walk away from bribe-tainted deals.

When employees see that the C-Suite is committed to compliance, they are more likely to share that commitment. Institute and enforce mechanisms whereby employees are encouraged to disclose compliance issues.

When employees see that candid communication is valued, they will be more likely to share information.

2) Make it practical and relevant

In addition to bright-line rules and prohibitions, help employees recognize risks, coach them on appropriate ways to respond to improper requests and support them when they avoid potentially improper situations.

This can be done through practical, scenario-based training, with realistic case studies that employees can work through in teams. Encourage employees to discuss why they chose a particular response and why other responses might not be appropriate.

When providing the best response, explain why other responses were less good. Case studies should be relevant to the industry you work in and the locations in question. Employees in pharmaceutical sales in China should not be trained using case studies about freight forwarders in Nigeria.

Everyone relates more easily to information that is relevant to what they are doing and where they work.

Carefully selected examples will also demonstrate that headquarters understands the local challenges they face.

3) Find the weak spots

To ensure training is relevant, visit foreign branch offices and subsidiaries regularly and speak with the employees. Discussions with employees out on the front lines can be a tremendous source of valuable and timely information.

They will know which government officials are demanding bribes, if any, or if other companies are offering bribes. Find out what the challenges are in specific locations. What do employees believe to be “reasonable and customary”?

What techniques have they found useful in the past for circumventing extortionate government officials? Do they believe that an industry-wide initiative might bolster their efforts? What positive suggestions do they have to address the problems they face?

And then tailor your compliance programs to address those specific risks and embrace the best of these suggestions, thereby improving your program and assuring employees that their concerns have been heard.

On a similar note, conduct exit interviews when employees are leaving to provide them with an opportunity to voice any concerns they may have been unwilling to address while still employed.

4) Keep it interesting

Employees will be less engaged in a compliance program based on strict rules.

There are many ways to make a compliance program interesting, engaging and effective.

Periodically send employees short videos on specific topics to re-enforce training or provide practical advice between required training sessions.

Include compliance quizzes in communications. Hold town-hall meetings or lunches to discuss hot topics and trends in compliance, and encourage employees to ask questions. Schedule team-wide exercises that incorporate contests or other activities related to compliance.

These strategies will keep employees interested and engaged and contribute to a stronger sense of community and a better culture of compliance. While a rule based program tells employees what not to do when choices are reasonably clear, prescriptive programs fall short when choices are less clear.

In these situations, employees need to be confident in their ability to apply good judgment based on candid discussion and scenario-based training. They need to know who they can approach with questions. And they need to know that their company will support them on the legitimately close calls.

How do you communicate the grey areas of your compliance program?

The post 4 strategies to overcome the grey areas in your compliance program and avoid corruption appeared first on Trade Ready.