Corporate bribery and corruption has rarely come to light in Australia – maybe the occasional collusion finds its way before the ACCC – but with the AWB scandal all that has changed. A report released last week shows that Australian listed companies are not well equipped to deal with the potential problem.
The Centre for Australian Ethical Research (CAER) has found that only 51 per cent of the top 100 ASX-listed companies have adopted policies on bribery. This compares with 80 per cent of US companies and 92 per cent of UK companies. Furthermore, only 18 per cent of Australian ASX 100 companies explicitly prohibit bribery and have a comprehensive system for ensuring employees comply. Only 15 per cent prohibit “facilitation payments” – the Clayton’s bribes – and only a third of those have a comprehensive system for implementing the policy. The CAER points out that Australia is very low risk, in terms of the likelihood of being involved in bribery or corruption. However, increasingly, the top companies are operating in either countries or sectors which are considered high risk. Judy Henderson, the chair of CAER, said: “Shareholders need to encourage companies to be more transparent with policies to prohibit bribery and corruption, to reduce the sort of investment risks that we’ve seen with AWB.” CAER believes the ASX’s ‘Principles of Good Governance and Best Practice Recommendations’ have been very successful in encouraging companies to adopt public statements of their ethics. Almost all of the ASX 100 companies make these disclosures. But companies are far more likely to include the business ethics disclosures suggested by the ASX than any others. The inclusion rate for regulating giving and receiving gifts, for instance, is less – at 79 per cent – while prohibiting giving and receiving bribes is 51 per cent and regulating facilitation payments only 24 per cent. If the ASX included bribery and corruption issues in its recommendations, it would increase company consideration of these issues, CAER says. The analysis also included a rating of the way in which the companies enforce their policies towards bribery and corruption. On CAER’s reckoning, 18 of the 51 companies with policies backed them up with an “advanced enforcement system”, 20 had an “intermediate enforcement system”, 12 had a “basic enforcement system” and one company had a “limited” system. CAER rates the systems based on employee training, compliance monitoring, reporting of breaches, whistleblower protection and systems for review. CAER, established in 2000 to provide independent social and environmental data on companies in Australia and the Asia Pacific region, is a not-for-profit research organisation. About 180 socially responsible investment issues are covered by the researchers.
The Coalition is reportedly considering a proposal to reduce the superannuation guarantee to 9 per cent if it wins the election. Many in the industry would understandably view any such move as a partisan effort to weaken the system, but they must also be open-minded about the evidence and accept that improving quality of service is the best response to critics.
Colin Tate AMJanuary 15, 2025
