State and corporate initiatives to curb corruption

The regulations that guide businesses are stringent, numerous and complex. Many companies have seen their reputations wane when regulatory authorities impose fines on them. In some cases executives have been sent to prison. Multiple regulatory authorities in various countries share information with each other more frequently than ever before. This is true in both developed countries and developing and emerging markets, as global money laundering norms become more stringent.

Companies encounter corruption in every sector of the Indian economy and their experience and perception differs depending on where they operate. India’s decentralized federal government system results in the regulation of corruption varying widely from area to area.

Faith in the system

One of the keys to success in dealing with issues of fraud, bribery and corruption is the quality of the system a company uses for reporting and investigating allegations of misconduct. If stakeholders view the investigation as biased or not competently managed, it will bring little good. Trust in senior management to do the right thing will be eroded and disillusioned employees will think twice about future cooperation.

Shardul Thacker is a partner at Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.