Slides Used in Class Session 9

8/2/2019 Slides Used in Class Session 9

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Video Peter Eigen (T.I.) first 7 minutes

Grease Payments

Relatively small sums of money given for

the purpose of getting minor officials to:

Do what they are supposed to be doing


faster or sooner.


better than they would otherwise.

Bribes

Relatively large amounts of money

given for the purpose of influencing

officials to make decisions or take action

that they otherwise might not take. If

the officials considered the merits of the

situation only, they might take some

other action.

Examples

Money given to minor officials (clerks,

attendants, customs inspectors) for the

purpose of expediting. This form of

payment helps get goods or services

through red-tape or administrative

bureaucracies.

Money given, often to high-ranking

officials. Purpose is often to get these

people to purchase goods or services

from the bribing firm. May also be used

to avoid taxes, forestall unfavorable

government intervention, secure

favorable treatment, and so on.

Corruption: the misuse of entrusted power for private benefit.


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Corruption as a form of behaviour which departs from ethics, morality, law and civic virtue.

Full support of upper management

The corporate compliance program must be enforced at all levels within the company.

If upper level management does not take efforts to combat corruption seriously, thenneither will employees.

Establish and adhere to a written corporate code of conduct.

A clearly written set of legal and ethical guidelines for employees to follow.

And clear policies and procedures relative to seeking guidance and making disclosures

Distributedto everyone in the company and, if necessary, translatedinto the languages

of the countries abroad where your company operates. The code must be effectively implemented and enforcedat all times.

Establish an organizational compliance structure

Corporate compliance officers and committees can play key roles in drafting codes of

conduct and educating and training employees on compliance procedures.

Should include senior VPs for marketing and sales, auditing, operations, human resources,

and other key officers.

Provide anticorruption training and education seminars; employees should be informed

as to whom they should contact to reportviolations or ask questions.

Compliance should be stressed as an integral part of the companys way of doing

business.

Managing corruption risk a few pointers I

Source: US Depof State, 2001 .and..


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Undertake due diligence.

Self-monitoring , monitoring of suppliers, and reports to the Board of Directors are good

instruments to strengthen compliance From vetting new hires, agents, or business partners to assessing risks in international

business dealings (e.g., mergers, acquisitions, or joint ventures), DD reviews can uncover

questionable conduct and limit liability.

Auditing and internal accounting controls.

Clear and concise accounting policy t hat prohibits off-the-books accounts or inadequately

identified transactions.

Monitor accounts for inaccuracies and for ambiguous or deceptive bookkeeping entries

that may disguise illegal bribery

Compliance mechanisms.

Create reporting mechanisms with adequate policies on confidentiality and non-

retaliation as well as other safeguards related to reporting is extremely important. Whistleblowing protections, suggestion boxes, or Helplines

I think I may have made a mistake. - An effective and non-threatening environmentthatencourages reporting when confronted with questionable situations.

Assist employees and agents on how to cope with and resolve difficult situations. Such

counseling not only protects the person in the field, it also protects the company.

Managing corruption risk a few pointers II

Source: US Depof State, 2001

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2100: 9.4 Billion

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2100: 9.4 Billion

3.5 Billion Years

Millions of different life forms

Humans - A recent addition to the portfolio of life forms


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Contribution of Ecosystems to Human Wellbeing

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Largescale economic development a recent phenomenon


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Economic Development

SocialWelfare

Human rights

HealthEducation

Job opportunities/income

Democratic institutions

Insurance

Choices of products and services at

affordable prices

.......

Many social benefits correlate positively

with economic development

Inglehart, 2009

Subjective Well-Being Economic, Political, Cultural Factors


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The change in human enterprise from 1750 to 2000

The great acceleration is clear: every component was accelerated sharply after 1950

Depicts 106,000 aluminum cans, the number

used in the US every thirty seconds.

Source: Chris Jordan, 2007


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Depicts 60,000 plastic bags, the number

used in the US every five seconds.



Depicts 426,000 cell phones, equal to the number

of cell phones retired in the US every day.


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What are the challenges to sustainability?

We need more than 1 planet earth to sustain consumption patterns

Source: Global Footprint Network


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Live long meaningful lives

Predictions for countries?


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Behaviour Matters (Values)

Cow simulation

Every turn, each cow looks at the patch that it is currently on, and eats a unit of grass.

Greedy cows (blue): eat the grass regardless of the length of the grass on the current patch.

Cooperative cows (red) won't eat the grass below a certain height.

Significance: below a certain height the grass grows at a far slower rate than above it .

Greedy cows eat the grass down to the nub, regardless of the effect on the overall

population.

Cooperative cows leave more food for the overall population (it re-grows much faster) at

a cost to their individual well-being.

If a cow's energy from eating grass reaches a certain value it reproduces.

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Competitive advantage is not Absolute advantage!

When resources are abundant greedy models have a

competitive advantage however when resources get

depleted greed may accelerate decline.

This has implications for our ability to sustain growth on

a crowded planet with finite resources.

Dilemma: too many people are invested in the old

(greedy) growth model who will change the rules of the

game and should they be changed?

Possible interpretation from the simulation

I = ?

What is driving this impact?

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I = P

OECD, 2008

I = P x C

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I = P x C x T

Documents

Slides Used in Class Session 9