Business & Economy

Corruption is high on the Nigerian corporate agenda, but lacks rigorous enforcement

Eighty-four percent of companies with Nigerian headquarters have formal policies in place that explicitly forbid bribes, almost closing the gap on the global average of 87 percent. However, the implementation and enforcement of anti-corruption programmes still lags behind many international firms
This is one of a number of positive developments highlighted in a report published last week by Control Risks, the global business risk consultancy.
Of companies with Nigerian headquarters only 25 percent have a board director and/or a compliance committee with specific accountability for anti-corruption – half of the global average of 50 percent and significantly behind South Africa, with 64 percent. Thirty-four percent have anti-corruption training in place for employees and only 16 percent have an additional training programme for senior executives and board members – only Indonesia (11 percent) and Colombia (9 percent) are further behind. Forty-four percent have a standard clause in agreements with sub-contractors forbidding the payment of bribes (global average 58 percent).
The survey also highlighted some positive news: One of the areas where Nigerian companies are much better prepared is in the handling of third-party risks. Sixty-five percent of respondents rated the corruption risk with regard to third party advisors as high or very high and they acted on it. Fifty-six percent of Nigerian companies have standard procedures in place for integrity due diligence on business partners.
Tom Griffin, senior managing director, Control Risks West Africa comments, ‘We are certainly seeing a positive change in attitude and awareness towards corruption across the region. The Buhari administration will ensure this focus remains high on the agenda. Ninety-seven percent of Nigerian respondents “agree” or “strongly agree” with the statement that international anti-corruption laws improve the business environment for everyone. Many of our clients value the fact that countries with the toughest laws and levels of international enforcement – the US, Germany and the UK – show a greater willingness to take risks and invest in countries with higher corruption risks, as they feel protected by the strong anti-corruption programmes they are required to implement.’
He adds, ‘This approach from international investors is starting to be adopted by our Nigerian clients as well who recognise that demonstrating strong governance and compliance is a source of competitive advantage when seeking international investment, customers and partners. However, companies need to be aware of the potential gap between the perceived protection a compliance programme brings and its actual mitigating effect. Reliance on a tick-box approach to compliance can be dangerous. Most (51 percent) of global respondents in our survey have conducted no internal corruption investigations in the past two years, highlighting the danger of waiting passively for a whistle to be blown, and perhaps suggests a culture of complacency in some organisations.’

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button