Dr Mark Lovatt writes on the Corporate Integrity System (CIS): What it is and how to overcome implementation challenges
The Corporate Integrity System (CIS) is a comprehensive framework that helps companies reduce corruption risks and improve integrity levels once it is in place. Implementing a CIS requires dedicated commitment and effort from interested companies, from the top to the lowest levels. A CIS involves the enhancement of a company’s policies and procedures, training and communicating the new policies and procedures to staff and external stakeholders, and most essentially, establishing a culture of integrity.
It is definitely not an easy task to implement the CIS, as it involves culture change and change management. In view of the enormous effort and work involved, there are several challenges that could derail the project, and we highlight them here along with tips on how to overcome these challenges.
Buy-in from the Top / Leading by Example
Tone from the top is the most important factor in any successful project. It is imperative for a company’s top management to demonstrate integrity in their actions and decisions as management cannot expect their staff to act with integrity if they themselves are unwilling to do so.
To further encourage stakeholders to view the CIS as an important part of a company’s culture, management should also frequently discuss the topic in their communication with these stakeholders. For example, management could include integrity topics in communication with staff.
Overcoming Old Habits
Old habits are hard to break, and some activities, which used to be the norm, may no longer be acceptable once the company has implemented a CIS. For example, a CIS may now prohibit procurement staff from having lunches with suppliers to discourage familiarity between the two. However, if procurement staff have been used to having post-meeting lunches with suppliers in the past, it would now be difficult for them to say “no” to these same suppliers – or they could just be reluctant to do so.
To overcome this, training and communication is the key. Management should train staff on the importance of avoiding the perception of misdoings, and how the CIS can guide them to do so. Communication of new policies to existing external stakeholders can also prevent the situation of having to reject an offer from arising. Management should also, at least at the early stages of implementation, encourage staff to monitor each other for compliance to the CIS until it becomes second nature to them.
Driving Corrupt Activities Into The Shadows?
Some critics argued that by having a CIS, the companies are driving corrupt activities underground, which makes it even more difficult to detect and address. This may be true during the initial stages, especially when employees can still continue reaping the benefits of old practices. However, these activities will not be hidden for long as it can easily be picked-up, either internally by colleagues, or externally by clients and customers, through whistleblowing channels. As such, it is important for the management to communicate the availability of the whistle-blowing channels and the protection offered by the company to whistle-blowers.
Ensuring Appropriate Resources
For most companies, implementing a CIS becomes secondary to revenue generating activities. In the short term, CIS is always considered to be an additional unnecessary cost, despite the fact that the benefits of practicing business with integrity can be large in the long term. For example, employees who act with integrity are less likely to collude with suppliers at the expense of the reputation of the company they represent.
Additionally, a CIS is further obstructed when companies attempt to identify personnel to champion integrity in their companies. This is perceived to be at loggerheads with an already strained fight for resources in the business operations of the company. This can be overcome by introduction of dual roles i.e. the role of an integrity officer is attached to a core function of the business, for example, the finance function, or the procurement function.
Organising Collective Action
Many companies question the rationality of implementing a CIS as it will put them at a disadvantage relative to competitors who gain undue advantages using corrupt means. In other instances, companies who act with integrity face challenges such as delays in obtaining permits because they refuse to make facilitation payments to government officials. Therefore, it is crucial for companies to participate in the formulation of collective action initiatives. This can be done by engaging with key industry stakeholders, which include government agencies and fellow industry players, to signal to the industry at large that they stand for integrity and good practices.