A New Weapon in the Mexican Fight against Business Corruption
José Raúl González Lima, Director of Corporate Financial Reporting, Grupo Televisa; Professor of Corporate Governance, Business School of the Panamerican University at Mexico City; and member of the IFAC Professional Accountants in Business Committee | April 17, 2015 |
The Mexican Enterprise Council (Consejo Coordinador Empresarial) is a private sector organization of the major commerce and industry organizations in Mexico. In January 2015, it published a declaration of business integrity and ethics principles—Código de Integridad y Ética Empresarial. The declaration consists of 12 principles to help companies in Mexico promote actions against corruption and contribute to improve related standards on integrity and ethics for any business relationship and entrepreneurial development.
These 12 principles are:
- Prohibit corruption. Companies should have a policy that prohibits any bribing, corruption, or collusion to avoid compliance with regulation or a company’s code of conduct, or to obtain a business advantage or a favorable decision.
- Transparency. Companies should have an explicit, clear, and transparent policy related to offering or obtaining gifts, meals, entertainment, travelling, donations, etc. that are usually legitimate but could be used for corruption or bribery.
- Integrity in making investments. Companies should establish procedures that prevent bribery, corruption, or collusion in relation to investments.
- Integrity in business relationships. Companies should implement mechanisms to ensure that their agents, representatives, customers, suppliers, associates, and business partners comply with the established policies to avoid corruption.
- Political contributions. Companies should avoid, in accordance with law, making political contributions or donations.
- Freedom in political participation of employees. Companies should respect the political preferences of their employees and not influence, interfere, or restrict their political participation.
- Monitoring and assurance. Companies should have policies, procedures, and controls in place to impose sanctions or any other consequences for not complying with the anti-corruption policies.
- Establishing a compliance function. Companies should have a governing body or responsible officer to establish, implement, and oversee compliance with the anti-corruption policies. Issues of non-compliance should be communicated with the board of directors or senior management.
- Commitment to a culture of integrity and honesty. Companies should have an ongoing communication and training program for all personnel to address adherence to anti-corruption policies.
- Development of compliance programs. The internal audit function—or senior management in smaller organizations—should review the controls associated with the policies to avoid bribery, corruption, or collusion.
- Whistle-blowing procedure. Companies should establish a free and anonymous communication line to receive any complaints or information related with the non-compliance of anti-corruption policies.
- Foster a culture of integrity and transparency. Every company should keep up-to-date with the legal framework for fighting corruption.
Corruption is an evil that significantly hurts social values, such as respect, transparency, veracity, integrity, and honesty. At the same time, corruption causes economic losses that are difficult to measure. Corruption also affects shareholders, investors, employees, and other stakeholders interested in a company. It also affects corruption competence and development of social welfare, and deteriorates the common good.
As companies adopt these principles and establish a strategy on integrity and ethics, together with a social commitment to fight corruption, they will recover and reestablish confidence in their institutions, and a solid, transparent and fair economic growth will be possible.
Professional accountants in business can contribute to adopting the principles in their organizations by:
- comparing current ethics code in their companies with the proposed principles;
- making suggestions to management for improving the content of such ethics code; and
- adopting the ethics and integrity guidelines provided by these principles in conjunction with the applicable ethics code for professional accountants in business.
There are many additional resources that can help companies maintain vigilance against fraud and corruption. Several years ago, IFAC issued practical guidance to assist professional accountants and their organizations in developing and implementing a code of conduct in a values-based culture—Defining and Developing an Effective Code of Conduct for Organizations. A Spanish translation of this guidance is currently being developed.
The recent IFAC/CIPFA International Framework Good Governance in the Public Sector also demonstrates how public sector entities could guard themselves better against fraud and corruption (a Spanish translation is expected in the second quarter of 2015).
Fighting fraud and corruption is a responsibility for everyone but especially for professional accountants in business. What else should professional accountants do to further improve integrity and ethical behaviors in the organizations they work for? Let us know!