More robust action needed to root out industry corruption, webinar hears

18 Jun 2024

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The latest webinar in FIDIC’s ongoing 2024 series of online events took place on 18 June 2024 and saw an expert panel of speakers coming together to highlight the importance of collaboration in the global fight against corruption. While there were improvements in a number of areas that were making it easier to report corrupt practices, more action was needed to make a difference, according to the speakers at this webinar.

The webinar, Why collaboration is essential in the fight against corruption, organised by the FIDIC integrity management committee saw FIDIC joining forces with Ernst & Young (EY) to demonstrate why the industry needs a truly collective approach to fighting corruption. The webinar was the second in a series of three events where FIDIC and EY are highlighting the importance of anti-corruption activities at all levels, from the individual to the nation state and, crucially, how construction professionals can play their part in advocating for integrity.

The webinar also previewed EY’s recently published 2024 Global Integrity Report, which is based on a major survey of more than 5,000 global board members, senior managers, managers and employees in some of the largest organisations and public bodies in 53 countries and territories worldwide. This year’s edition identifies the need for “speak-up cultures” and whistleblowing as a significant theme.

The expert panel of speakers at the webinar was headed up by webinar chair, Richard Stump, vice president of leading US architecture, engineering and consulting firm RS&H and chair of FIDIC’s integrity management committee. The speakers included EY partners Nick Jones from the UK, Sharon van Rooyen from South Africa, Cecilia Melzi from Peru and Lyndon White, senior adviser at Lawbrook Project Advisory and also the vice-chair of the FIDIC Integrity Management Committee from Australia.

Introducing the webinar, James Mwangi, CEO at Nairobi-headquartered consultancy firm, Kurrent Technologies Ltd and also a vice chair of FIDIC, said: “Integrity is one of FIDIC’s core values. For many years we have highlighted the need for organisations to put integrity at the heart of their operations. And we know that organisations that do this are more resilient, more profitable and better able to retain their top talent and attract new customers, especially during challenging times.

“Acting with integrity also allows consulting firms to be seen as trusted advisors to customers, which in turn allows those customers to make better business decisions. But integrity is much more than a mission statement and written policies. It’s something that everyone should have a responsibility for developing - from the CEO and the board right down to junior employees, business partners and third parties.”

Opening the event, Richard Stump, vice president of leading US architecture, engineering and consulting firm RS&H and chair of FIDIC’s integrity management committee, said that the webinar would be discussing the current state of integrity globally and also the all-important issues of whistleblowing and ‘speak-up’ culture.

First speaker EY partner Nick Jones introduced the results of the new EY 2024 Global Integrity Report and said that the report was based on a survey of 5,464 board members, senior managers, managers and employees in a sample of large organisations and public bodies in 53 countries and territories across the Americas, Asia-Pacific and Europe, Middle East, India and Africa. Interviews were conducted through online panels between October 2023 and January 2024.

Integrity climate improving but headwinds continue

Jones said that the integrity climate was improving, with almost half (49%) of global respondents believing that compliance with their organisation’s standards of integrity had improved in the last two years. “Headwinds continue though, with nearly four out of 10 (38%) global respondents admitting that they would be prepared to behave unethically in one or more ways to improve their own career progression or remuneration package - more than one and a half times higher than the findings in our last report,” he said. Jones also said that third-party risk was a key issue. Respondents indicated that third parties were involved in two-thirds of significant integrity incidents, including fraud and regulatory breaches.

He also highlighted the issue of training and awareness. “Around 52% of global respondents agree that awareness, training and communications, as well as governance and leadership, are top priorities for their integrity programs over the next two years. Jones said there were three key takeaways from the report as follows.

Communicate: Communicate and demonstrate, not only what employees at all levels of the organisation need to do to act with integrity, but also why it’s important to do so.

Establish: Establish a robust crisis management plan to instil confidence that the organisation can manage a significant integrity incident (if or when) it arises.

Focus: Focus on the positive reinforcement around integrity, placing greater emphasis on performance metrics and compensation structures that focus on incentivising and rewarding good behaviour.

Second speaker EY’s Sharon van Rooyen from South Africa gave an update on the report’s findings from the Africa region. She said that in South Africa, around 52% of respondents said that fear for their personal safety was a barrier to reporting corruption, which was a worrying finding. She also spoke about recent legislative developments and the steps that companies and organisations need to take to safeguard themselves. A robust anti-corruption strategy and whistleblowing policies were essential and all organisations needed to have these in place. “Also, employees, stakeholders and suppliers need to feel that there is a supportive environment in place around reporting corruption,” Van Rooyen said.

The trigger for integrity should always be values-based, not regulation

Third speaker EY partner Cecilia Melzi from Peru offered some perspectives from the South America (LATAM) region. “The main reason to improve integrity should be direction from management and being a strategic value of a company, not because of legal regulations. The trigger for integrity should always be values-based,” she said. Melzi said that In the LATAM region, one in three people were aware of corruption but not reporting it, due to pressure not to report or a belief that it wouldn’t be taking seriously. In this context, a robust whistleblower programme was essential which protected the anonymity of those reporting corrupt practice, Melzi said. Training sessions should also be given to all employees, she said.

While there were a number of positive findings in the Global Integrity Report from the LATAM region around willingness to report, there was still work to be done especially around the widespread implementation of whistleblower programmes and adequate training for employees – both of which were key in combatting corruption and creating an environment where it was more likely to be reported.

It's about people and we need to do more

Lyndon White, senior adviser at Lawbrook Project Advisory and also vice-chair of the FIDIC Integrity Management Committee from Australia, said that the culture in Australia of “Don’t tell on your friends” needed to be addressed. Collaboration wasn’t easy and its facilitation through strategies that built a people-centred, integrity-focused organisation was essential,” said White. “It’s about people who are involved in the everyday work doing something about corruption and feeling that they can report it safely,” he said. Improvements were being made in a number of areas, but still more needed to be done.

A number of important questions were raised by attendees in the discussion including the role of leadership, the need to improve integrity in organisations, recent legislative developments affecting corruption, the situation in the former Eastern Bloc and specific issues there, the main challenges faced when trying to collaborate with different organisations or sectors in anti-corruption initiatives and how these can be overcome to ensure effective collaboration. Other points raised by attendees were how whistleblowing programmes would work where public funds are involved, given that reporting might contravene contractual obligations, and also the difference between ‘management’ and ‘leadership’.

Summing up the webinar, Richard Stump, chair of FIDIC’s integrity management committee, said that the webinar had raised many of the key issues around this all-important issue for the industry. “We talked about the importance of collaboration and the fact that legislation and regulation is not enough to combat corruption – culture and creating an integrity-focused organisation is crucial. Individual action is crucial and ‘being the change you want to see in the world’ is vital,” Stump said. He also looked forward to later in the year and another FIDIC anti-corruption webinar to coincide with World Anti-Corruption Day.

Click here to download the 2024 Global Integrity Report.

The next webinar in FIDIC’s 2024 series of events takes place on Tuesday 25 June 2024, How a collective industry voice makes change happen - Highlighting MA best practice and making a difference, will highlight some of the best practice success stories of FIDIC member associations and how these have benefited their member firms and the industry in their country.

Click here to book your place at the webinar, How a collective industry voice makes change happen - Highlighting MA best practice and making a difference.

Click on the link below to watch the full webinar recording. 

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