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Davos

Corruption and the erosion of trust

Jim Smith  President and Chief Executive Officer

Jim Smith  President and Chief Executive Officer

Today’s common struggle against corruption goes far beyond compliance. More problematic is the profound and worsening trust deficit that exists between institutions and individuals.

The widespread perception that institutions—both public and private—are not acting in the interests of the people they serve pervades the thinking of communities across the globe. News organizations, which have historically served as the watchdog for governments and business leaders, are less trusted by the public than ever before.

Public confidence has been corroded by a concentration on near-term priorities and payoffs, propelled by election-cycle politics or quarterly results targets that too often leave children worse off than their parents. Rather than looking towards a sustainable future that works for everyone, many have been left with a sense of desperation about the ideals of progress, technology, trade, and globalization.

We must make integrity the norm, driven by public-private cooperation, innovative leadership, and effective technological tools.

As is often quoted, sunlight is the best disinfectant. Transparency is more important than ever. We must remember that the business community, too, is a victim of corruption.

The power of networks

The Partnering Against Corruption Initiative (PACI) is one of the cross-industry collaborations conducted by the World Economic Forum. For the last decade, we have sought to rebuild trust in both the supply and demand side—working with governments, business leaders, and civil society to promote transparency.

We have built networks across sectors and supply chains to encourage best practices and share products that improve transparency. For example, one promising new advance is “speak-up systems,” which encourage individuals to report questionable or corrupt behavior from peers or supervisors.

Harnessing new technology is also important, creating opportunities for us to engineer corruption out of the system. New systems like distributed ledger technology—a formation of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions—can contribute to creating a more secure environment for real-time data sharing.

Identifying the bottlenecks

Last month, as we recognized International Anti-Corruption Day, we announced PACI’s latest step toward restoring trust: the Strategic Dialogue Series. By convening government and business leaders from diverse regions and sectors, we will create opportunities to develop knowledge and share practical solutions.

First, we will invite business executives and public officials from around the world to participate in an anonymous survey. PACI and other leading experts will analyze the results to identify opportunities and challenges for effective public-private cooperation on the issue of battling corruption.

Next, we will convene government ministers and business executives to discuss issues and bottlenecks and then identify and prioritize solutions. We will encourage them to propose and advocate actionable solutions.

Finally, we will provide an interactive platform to distribute key findings. To foster transparency, PACI will publish all findings, which can inform and stimulate further collective action.

What business can and should do

Advancing the anti-corruption agenda is more than a business imperative: it is our duty, and it is in everyone’s interest. We must preserve and nurture the niche in which we do business. We must uphold our business integrity, enhance transparency, and maintain robust checks and balances on inappropriate behavior.

Promoting an ethical culture is a necessary element of good management. The best way to protect this culture is to actively promote it from the top—with the clear commitment of leadership to a culture of integrity and to the fundamentals of effective corporate governance: fairness, accountability, transparency, and responsibility. And, the commitment must be ongoing and continual.

The business community is uniquely situated to help unite all elements of society to identify and share innovative ways to develop collective action, deepen our shared understanding of the issues, and prompt change. Now is the time to develop working solutions that combine strong corporate governance and effective anti-corruption initiatives to restore trust in our governments and corporations.

Fidelity to rebuilding trust is an essential element in the success of businesses, governments, and societies around the world. The system simply doesn’t work without it.

View the story as it originally appeared on the World Economic Forum website.

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Authors


Jim Smith is the President and Chief Executive Officer of Thomson Reuters. Jim began his career as a journalist and rose through the ranks at Thomson Newspapers to become responsible for operations in North America. He then led a number of professional publishing businesses serving the legal, regulatory and academic markets. He served as global head of Human Resources before becoming Chief Operating Officer of The Thomson Corporation. Following the acquisition of Reuters in 2008, Jim ran the Professional division of the combined company. He was named Chief Executive Officer in January 2012.Jim is a director of Pfizer, Inc. He also serves on the board of the World Economic Forum’s Partnering Against Corruption Initiative and is a member of the Forum’s International Business Council, as well as on the International Advisory Boards of British American Business and the Atlantic Council. Jim graduated from Marshall University.
David Cruickshank, Chairman, Deloitte Touche Tohmatsu Limited

David Cruickshank is the Chairman of Deloitte Touche Tohmatsu Limited. He was elected into the role of Chairman in June 2015 having served on its Global Board for eight years from 2007. Prior to this, he was Chairman of the UK member firm from 2007-2015. He is a Chartered Accountant and a graduate in business and economics from the University of Edinburgh. David is a member of the World Economic Forum Chairman’s group and a Board Member of the Social Progress Imperative.

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