Corruption on the rise in Sweden
- How to assess and manage potential risks
With the recent news from Transparency International on corruption in Sweden, three questions are warranted.
Firstly, how should we understand the ranking? Secondly, why is Sweden more corrupt than other Nordic countries? And thirdly, what measures need to be taken by companies in both the private and public sectors?
Key issues in this context that are rarely discussed are our often pre-primed mindset about corruption and the fear of finding out.Louise Brown, anti-corruption auditor at FCG
Transparency International annual Corruption Perceptions Index shows that Sweden is falling behind its Nordic neighbours. With 84 points, Sweden still belongs to the top of the least corrupt countries in the world, but is lagging behind Denmark, Norway and Finland.
One explanation to the first question and Sweden´s deteriorating ranking may be individually confirmed or suspected corruption cases which have gained particular attention. For example, the large bribery case in Region Skåne which cost tax payers >800 million SEK, or the news before the last election that 5 of 7 political parties are prepared to receive covert funding. The impact of these and other cases tend to negatively influence the perception of corruption and the trust in society at large.
Another survey which also offers a current view on the state of corruption in Sweden is the Nordic Business Ethics Survey based on 5,000 respondents in the private sector. It shows that 50% of respondents have observed bribes being offered or requested during the last year in their own company.
As to the second question, it is often said that we are naive, that there is a lack of understanding of how corruption works. For sure, continuous awareness raising and communication is important. Most organizations today have a policy and offer training to staff.
But equally important or even more importantly, when discussing anti-corruption, one should ask oneself what kind of governance and controls that the organization has implemented to manage corruption risks. What the exposure can be must be considered broadly in relation to the business and operating model, organizational structure, type of staff, markets, customers. What this all looks like will inform a risk-based approach, internal controls and due diligence processes to be properly equipped.
A common pitfall is a pre-primed mindset that there are no risks, or to limit the risk assessment to representation and gifts. Many organizations need to strengthen their processes in this area, or in some cases there are no processes or procedures in place yet. Plus, equally important, internal audit.Louise Brown
An anti-corruption program can very well be compared to and be integrated with an internal fraud prevention program. An important component is the preparedness to act and manage incidents and be able to drive corrective actions without fear. The role of senior management and the tone at the top with regards to potential disruptions and troubleshooting should not be underestimated, given that revealed non-conformities and incidents impact business continuity and generate costly damages in terms of forensic measures, legal costs, delays, brand and reputational damage. The opposite is coined Fear of Finding Out.
With regards to the third question, anti-corruption programs have a lot to learn from both the AML-area in terms of a systematic and risk-based approach. If there is anything one can recommend given the news about the state of corruption in Sweden, it is that it is time to get more practical and think more broadly about operational risk. The assumption that corruption is something that happens elsewhere does not work.
For companies to navigate in the obviously changing environment of corruption risks, organizations are well placed to do a health check and inventory on potential risks, what tools, controls and audit procedures that they should have in place and how well do they function. Whatever measures that are taken, do make sure they are appropriate and effective.Louise Brown
- There are seven processes in a complete anti-corruption program, starting with risk assessment, leadership, planning resources and activities, support with regards to training and communication, operational functions including controls, due diligence and whistleblowing, followed by continuous follow-up including internal audit and finally evaluation and corrective actions.
- There are good benchmarks and auditable standards for anti-bribery and integrity compliance to support this work according to the above fundamental processes, such as the ISO37001, the Code of Business Conduct by the Swedish Anti-Corruption Institute, the World Bank Integrity Compliance Guidelines or the International Chamber of Commerce Rules on Combating Corruption.
- A good start is always to update the risk assessment and review or stress test internal operational functions and controls.
- Think about bribery and corruption in the bigger context, directly linked to or associated with fraud, insider and infiltration issues, conflicts of interest and other economic crimes.
- Targets for bribery attempts can typically be procurement but do think more broadly. Other examples can be access to sensitive information, the opportunity to engage in sideline business activities and thereby gain a personal benefit, offerings of specific investment opportunities etc.
Read more about the new CPI and comments on the developments by Louise Brown on SVT (Swedish):