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Integrity and responsible governance in a private sector - case Finland

Integrity and responsible governance in a private sector - case Finland. Pentti Mäkinen Conference of the Corruption-free society Prague 12 September 2014. Is Finland really a low corruption country.

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Integrity and responsible governance in a private sector - case Finland

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  1. Integrity and responsiblegovernance in a privatesector- case Finland Pentti Mäkinen Conference of theCorruption-freesociety Prague 12 September 2014

  2. Is Finland really a lowcorruption country • Yes: According to the TI CorruptionPerception Index, CPI, Finland is one of thebest • Thecorruption is not a problem in publicsectorneither business to business • Lowamount of casesinvestigatedbypoliceorjurisdictionbycourts • How weseethebasicelements of lowcorruptionsociety • Theopeness of thesociety, free and independent media, democraticvaluesand politicaldesicion-making, highcommitment on personalworkethic, strong business culture includingtendencyto obeythelawverystrictly • But in Finland wefacealsoproblems: • Increasingmistrust on politicians on bothlocal and nationalleveland also on business • Non-transparentnetworks (”oldboysnetworks”)

  3. Theimportance to preventcorruption • WhyFinnish business wants to tacklecorruption and bribery • Maintaintheleading position as one of theleastcorruptedcountries • Preventcorruptionboth in publicsector and business to business relations • Keepthegoodreputation of Finland • MinorcorruptiongivesFinnishenterprisescompetitiveedge operating beyondnationalborders • Corruptionmakes it easier to blackmailenterprises • Corruptiondistortsbasicelements of market economyespeciallyfreecompetition

  4. How enterprisecouldberesponsible • Anti-corruptionpolicystartsfromthetop of thecompany • Highcommitment of the Board of directors, CEO and Executive Team • Corporategovernanceincluds anti-corruptionpolicy • Corporateethicscodemustbeuniversal • No differentactions in differentcountries • Sameethicalstandarsmustbeappliedeverywhere • Responsibility of subsiadiaries and agents • Duediligencemustbedonebeforecontracts • Documentation of allexternalrelations • Monitoring of thepartner´sconduct

  5. How to countercorruption in privatesector • Corporate culture (corporategovenance) in whichanyform of corruption is nottolerated • Companiesneed a specialprogrammecounteringcorruption • Crucial for biglistedcompanies • Company mustin practicecomplyitsownpolicy • If so, companyhas no need to explain in media afterwards • An effective anti-corruptionpolicy • Includesvalues, process, training and guidance • Provides a framework for good business practices and risk management counteringcorruption

  6. Basic principles of anti-corruptionpolicy • Enterprise shouldprohibit • anyforms of corruption (icludingbribes) • whichcouldprovideimproperbenefits to customers, agents, contractors, suppliersoremployees of anysuch party orgovernmentofficials • Enterprises shouldprohibit • an employeearrangingoraccepting • anyforms of corruption for theemployee´sbenefit

  7. Relationswithcontractorsand suppliers • Fair and transparentprocurementpractices • Duediligence: • Evaluatemajorprospectivecontractorswhethertheyhave an effective anti-corruptionpolicy • Monitoringthe anti-corruptionpolicy of contractors and suppliers • Avoiddealingwithpartiesknown to bepayingbribes

  8. Communication • Company needs an effectiveinternal and externalcommunication of its anti-corruptionpolicy: • training for managers, employeesand contractors • Direct and immediateinformation of theviolationsof theanti-corruptionpolicy • Anti-corruptionmeasuresshouldbedeveloped in consultationwithemplyees • Clearmessage for employees: • no negativeconsenquenses for refusing to paybribeseveniftheenterprisemightsuffer in business • Appropriatesanctionsfor thosewhohavenotfollowedthe anti-corruptionpolicy

  9. Internalcontrols and audit • Documentsconserningallfinancialtransactionsshouldbeavailable for afterwardsinspections • No off-the-booksaccounts • Effectiveinternalcontrolsystem • Audit systemwhichinformstheshareholdersbriberyand otherforms of curruption

  10. Thankyou for your attention

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