In many circles it is widely held that business and regulation are polar opposites: the latter restraining the former to prevent free enterprise and economic growth.
What is less widely acknowledged perhaps is that often it is not regulation per se that hampers business, but bad regulation. Good regulation, in fact, can be welcomed by business for the principal reason that it makes the rules clear. Properly enacted, good regulation will level the playing field, promote fair competition and allow good businesses and the countries they operate in to prosper.
It was interesting to read therefore that a Government consultation on the Bribery Act produced a corporate ‘thumbs up’ for what has been criticised by some business groups as the toughest anti-corruption legislation, the UK Bribery Act.
Prior to becoming law in 2011, there was much debate about the impact the Act would have on UK competitiveness. Would UK plc. lose out abroad to those companies not bound by such strict national legislation? Can business be done in certain parts of the world without paying bribes? How can it be prevented in the supply chain?
In the 12-month period before the Bribery Bill became law, GoodCorporation discussed the implications of the impending legislation with many corporate figures and industry leaders. What was clear then and is even more evident today is that while the Act may be regarded as ‘tough’ it sets very clear expectations.
What we have also seen since 2011 is the raising of the bar globally. Countries such as China, India, Brazil and even Russia have begun to tighten up their bribery laws and enforce them. Globally then, it is clear that any tolerance for corrupt practices is rapidly decreasing.
Many businesses are aware of this and have invested heavily in putting robust ant-corruption systems and processes in place. The upside, in the long term, should be the creation of a level playing field. There is still a way to go, as the Transparency International Corruption Perceptions Index testifies. However, what we know from the anti-corruption work we do with clients and from our business ethics debates at the House of Lords is that businesses want to compete fairly without the need to resort to bribes.
The survey evidence shows that watering down the Bribery Act is not what corporates want, as the Act is not perceived to be a hindrance to business. On the contrary, it is seen as good regulation that companies want properly enforced to ensure that less scrupulous companies cannot use corruption to gain an unfair advantage. This should be welcomed because it supports good businesses rather than be seen as a blanket anti-business approach.
Blog post – December 2015
Having worked with financial institutions on business ethics, we welcome any initiative designed to protect consumers further and rebuild public confidence in the financial services sector. Intervening earlier in the product chain is long overdue and should be welcomed, but…