Resources > Archive 03

Executives condone graft in firms
By CATHY ROSE A. GARCIA
TODAY Senior Reporter
http://www.abs-cbnnews.com/NewsStory.aspx?section=Business&OID=54524

 

Many senior executives appear to be ambivalent toward corporate misconduct and corruption, according to a recent study by the Asian Institute of Management (AIM).

In a presentation Monday, AIM business and social research desk researcher Ned Roberto said the study attempted to measure top management executive?s attitudes on rank-and-file, middle and senior management misconduct, and their policy behavior and response to misconduct.

The survey, which polled 96 respondents of which 82 percent are top and senior executives last April, showed there are no uniform standards on corporate misconduct for rank-and-file, middle and senior management executives.

Roberto said the study showed some executives even perceive some acts of corporate misconduct as ?sometimes OK.?

?Slightly less than half of the senior executives believe that doing something for a friend or relative, which is commonly thought to be inherently wrong, makes it right. While corporate executives are quick to judge government officials as guilty of this, some look the other way when it comes to misconduct from their ranks,? he said.

The survey showed an apparent ?cultural rejection? of whistle-blowing, since many senior executives do not believe this is as a means to minimize and control wrongdoing. ?Here, executives don?t like it and practically condemn it. It is not in Philippine culture to make sumbong [report],? Roberto said.

Around 75 percent of the respondents cited the purchasing department as the most corrupt, followed by accounting and finance, and sales and marketing departments.

Many of the senior executives? attitudes showed that they stretched the limits of right and wrong, with regards to certain instances of corporate misconduct. Roberto said executives would distort the meaning of ?wrong? to protect their own interests.

?Executives believe that donating to foundations of well-known powerful individuals, with whom they might eventually do business, is not at all wrong and may even benefit their company,? Roberto said.

Around 24 percent of executives find manipulation of corporate documents and financial statements are tolerable or even acceptable under certain circumstances, while another 40 percent do not find anything wrong with interfering in their companies? bidding process.

Roberto noted executives are ambivalent when it comes to adopting dirty tactics versus their competitors. Dirty tactics such as tampering with a competitors? product and spreading false information about a competitor are only seen as not always wrong. Around 22 percent of the respondents find it acceptable to spy on competitors and even their personal lives.

To improve the executives? attitudes and behaviors on corporate misconduct, Roberto said there must be a balance between the ethical and compliance program of companies. ?By institutionalizing a culture of compliance, backed by systems designed to reduce the prospect of criminal activity within the company and detect such activity where it exists, companies can effectively curb corruption within its ranks,? he said.

Nestlé Philippines chairman Juan B. Santos said he was not surprised by the study?s findings of graft and corruption and misconduct in the private sector. ?What is worrying is there are a significant proportion who tend to agree that misconduct is not wrong... There is an existence of corruption but we must change our behaviors and attitudes,? Santos told reporters.

Securities and Exchange Commission (SEC) chairman Lilia R. Bautista, meanwhile, said the government and private sector should join efforts to battle against graft and corruption. She said the SEC is continuing to push for more corporate governance reforms.

Philippine Long Distance Telephone Co. corporate governance advisor Rene G. Banez proposed a formula to stop corruption, saying it should be done by reducing the monopoly of power, limiting and clarifying discretion and increasing transparency.

 

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