Bibery and Corruption

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11 Ethics
Business brief

Bribery and corruption
Whether persuading key officials to give authorization to set up in business," grant government contracts, or just let your goods through customs, the alternatives for the word bribe are many and varied: kickback, sweetener (AmE). backhander (BrE), baksheesh and the greasing of palms (international). The law courts, if it gets that far, will refer more prosaically to illicit payments and defendants in such cases may just talk about commissions. If payments go to a slush fund to finance a political party, this form of corruption may be referred to as sleaze, especially by journalists.

The corporation as good citizen

All businesses increasingly want to be perceived as good citizens. Different types of business face different ethical issues. Following the accounting scandals at Enron and WorldCom, which gave a false view of their profits, despite the work of their auditors, the outside accountants who are meant to prevent this, there has been pressure on legislators and regulators to improve accounting standards.

When the strain of competing gets too much, competitors may go for the easier option of price fixing, so that each can maintain a reasonable profit margin. Competitors who do this form a cartel. This is an area where outsiders may only find out what is going on if one of the managers involved contacts the authorities. Someone doing this is a whistleblower.

Financial institutions try to prevent insider trading by erecting notional barriers called Chinese walls between different departments: to prevent someone in share trading from discovering from the mergers department that a particular company is involved in merger talks and that its share price may soon rise. Financial institutions also have to guard against money-laundering, where money passes through the banking system in a way that disguises its criminal origins.

Companies selling personal finance promise to ensure that clients are sold...
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