Recent corporate scandals highlight the importance of both public sector initiatives and sound internal company policies in the fight against fraud and corruption. Policymakers, international organizations, and advocacy groups all agree these supply-side anti-corruption efforts are a critical component of the anti-corruption tool kit.This book, based on research conducted by the World Bank and the Conference Board, describes the efforts of Western and Asian companies to develop good standards of business conduct in their East Asian operations. Case studies from a wide range of corporate settings offer concrete examples of best practices in program creation, implementation, and effectiveness. The book also provides examples of dissemination of those practices that underscore the importance of business partnerships with the public sector and civil society organizations.An essential guidebook for companies, policymakers, academics, and nongovernmental organizations, this book will be of interest to anyone seeking improved business conduct standards in developing countries.

Acknowledgments

xi

Foreword

xiii

Abbreviations

xv

Executive Summary

xvii

PART I

1 Introduction

3

(4)

Notes

6

(1)

2 Corruption: The Firm's Perspective

7

(26)

Types of Corruption

9

(6)

Channels of Corruption

15

(1)

Corruption Is Bad for Business

16

(4)

Determinants of Vulnerability

20

(5)

Bribery in International Transactions

25

(5)

Notes

30

(3)

3 The Spread of Corporate Compliance Programs

33

(14)

Legal Framework

34

(4)

Internal Incentives

38

(6)

Notes

44

(3)

4 Compliance Programs in Practice

47

(22)

Building a Culture of Compliance

47

(1)

Components of an Effective Program

48

(11)

Implementation Issues

59

(2)

Application to Business Partners

61

(3)

Are Compliance Programs Working?

64

(3)

Notes

67

(2)

5 The Environment for Compliance Programs

69

(14)

Proper Internal Controls

69

(3)

Corporate Governance

72

(5)

Business Culture and the Example of Guanxi

77

(3)

Notes

80

(3)

6 Building Knowledge and Resources for Better Business Ethics: Current Initiatives

83

(18)

Raising Awareness about Ethics and Corporate Responsibility

83

(3)

Dissemination of Good Practices within the Private Sector

86

(6)

Integrated Efforts with the Public Sector

92

(1)

The Case for Standards

92

(7)

Potential for Increased Regional Cooperation

99

(1)

Notes

99

(2)

7 The Current Agenda

101

(8)

PART II CASE STUDIES

Business Ethics Programs and Antibribery Initiatives of Japanese Companies: Changes in Legislation and Corporate Efforts

109

(10)

Social and Institutional Influences

109

(3)

Actions by Companies

112

(1)

Antibribery Provisions: The Unfair Competition Prevention Law

112

(2)

Antibribery Initiatives by Japanese Companies

114

(3)

Unresolved Issues

117

(1)

Looking Ahead

117

(1)

Notes

118

(1)

Kobe Steel

119

(7)

Origins of the Ethics Program

119

(4)

Implementation System

123

(1)

Prevention of Bribery of Foreign Public Officials

124

(1)

Notes

125

(1)

Sumitomo Corporation

126

(6)

Managerial Commitment

126

(1)

Corporation Management Principles and Activity Guidelines

127

(1)

Implementation System

127

(2)

Reporting and Warning Procedures

129

(1)

Prevention of Bribery of Foreign Public Officials

130

(1)

Note

131

(1)

Toyota Motor Corporation

132

(6)

Basic Philosophy and Top Leadership

132

(1)

Corporate Code of Ethics

133

(1)

Implementation System

134

(1)

Warning Procedures

135

(1)

Prevention of Bribery of Foreign Public Officials

136

(1)

Application to Subsidiaries

136

(1)

Note

137

(1)

The Chinese Art of Guanxi in Business

138

(10)

What Is Guanxi?

138

(1)

Why Is Guanxi Important and Relevant in the Context of Chinese Business?

139

(2)

What Business Conduct Issues Arise Concerning Guanxi?

141

(3)

Does Guanxi Facilitate or Impede Misconduct?

144

(1)

How Will Guanxi Evolve in the Future?

145

(1)

Notes

146

(2)

Jardine Matheson

148

(3)

Origins of the Ethics Program

148

(1)

Implementation System

149

(1)

Reporting and Warning Procedures

149

(1)

Application to Joint Ventures

150

(1)

CLP

151

(3)

Origins of the Ethics Program

151

(1)

Application to Joint Ventures

151

(1)

Implementation System

152

(1)

Advice and Learning Systems

152

(2)

LG Electronics

154

(3)

Corporate Code of Ethics

154

(1)

Implementation System

155

(1)

Warning Procedures

155

(1)

Beyond the Company

156

(1)

Government-Led Ethics in Singapore and Its Transborder Impact

157

(6)

Note

162

(1)

"ABC Healthcare Corporation"

163

(7)

Origins of the Ethics Program

163

(1)

Business Practices Guide

164

(1)

Implementation System

165

(3)

Reporting and Warning Procedures

168

(1)

Application to Partners

169

(1)

Note

169

(1)

"NATCOM"

170

(8)

Origins of the Ethics Program

170

(1)

Code of Business Practices

171

(1)

Implementation System

171

(2)

Reporting and Warning Procedures

173

(2)

Implementation Issues

175

(1)

Looking Ahead

176

(2)

ABB Group

178

(8)

Origins of the Ethics Program

178

(1)

Ethics Standards and Code of Practice

179

(1)

Implementation System

180

(3)

Reporting and Warning Procedures

183

(2)

Application to Partners

185

(1)

Royal Dutch/Shell Group

186

(8)

Origins of the Corporate Governance and Ethics Program

186

(1)

Implementation System

187

(2)

Compliance Procedures

189

(1)

Public Reporting

189

(1)

Application to Partners

190

(1)

Experience with the Ethics Program in East Asia and Pacific

190

(3)

Note

193

(1)

Société Générale de Surveillance

194

(6)

Origins of the Ethics Program

194

(1)

Corporate Code of Ethics

195

(1)

Implementation System

195

(2)

Issues

197

(3)

Suez Group

200

(9)

Origins of the Ethics Program

200

(1)

Basic Documents

201

(1)

Implementation System

202

(2)

Compliance Procedures

204

(1)

Application to Subsidiaries and Affiliates

204

(1)

Experience with the Ethics Program in East Asia and Pacific

205

Appendixes

A Vulnerability of Firms to Extortion: An Econometric Analysis

209

(6)

B Alternative Interpretations of the Bribe Payers Index

215

(6)

C Methodology for the Case Studies

221

(4)

D Resources and References Available on the Internet

225

(8)

References

233

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Fighting Corruption in East Asia : Solutions from the Private Sector

9780821355350

082135535X

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