Can B2B lead the fight against corruption?

In a series of blog posts curated by the World Economic Forum’s Partnering Against Corruption Initiative (PACI), a number of leading voices will present their perspectives on anti-corruption in the run-up to World Anti-Corruption Day on 9 December. In the following post, Sachin Taparia, Chairman and Managing Director, New Venture in Social Transformation and Member of the Advisory Board, TVS & Sons Limited, calls for Indian business to lead by example.

Corporate India today bears a new look vis-à-vis that of a few decades ago. We now have a sizeable number of companies with revenues exceeding US$ 1 billion. We have access to world class technology, a sizeable workforce and global investors. However, on the corporate governance front – ethics and integrity – we still only have a handful of companies that meet global benchmarks. India is currently  on 95 position on the Transparency International Index. I believe it is time that the Indian industry does something about raising the integrity and governance standards of our businesses.

With my experience of having set up and built a business for a large US multinational, I am convinced that in the India of today an organization can operate and grow while sticking to the highest standards of ethics. It’s not easy, but it’s possible. On the operational front as well, although it is bound to be harder, one can run factories, warehouses and retail stores with an “ethics first” approach.

We have had social movements against corruption in the last couple of years, which have primarily focused on the citizen-to-government and business-to-government transactional integrity. However, the business-to-business transactions need to be given equal attention, if not more.

To get a sense of the business-to-business corruption magnitude, all you need to do is talk to some small and mid-sized businesses in India and understand how they function. The wise ones will sadly talk about how corruption is a challenge while others have just accepted it as part of doing business. Some call it facilitation and liaising; some even call it marketing and relationship management.

Businesses face integrity issues in supplying products and services to Indian corporates and collecting their dues. Becoming a distributor or dealer of established brands is challenging where the corporate manager involved has discretion. There also exists a significant disconnect between the board room and the operational levels of a company with respect to ethics and integrity. The board or senior leaders of the company often are not even aware of some of the ethical challenges they have within their corporation. The good thing is that in many cases CEOs and boards want to do the right thing, but are unable to effectively implement it down to the operating levels.

Improving integrity in citizen-to-government and business-to-government transactions are vast areas by themselves and call for a revolutionary and in-depth approach when it comes to implementation. However, on the business-to-business front, with some innovation and leadership commitment, corporates can implement integrity values and controls much faster. Once the integrity values and operating model of employees and the company changes, the same will most likely carry through in their business-to-government transactions.

To summarize, business-to-business transactional integrity is something we absolutely need in India for a lot of reasons. We, as businesses, often point our fingers towards the government on corruption issues. Yet, we need to demonstrate that our business-to-business transactions are clean and we have an operating model that works. The key to implementing these standards would be the willingness and commitment of our business leaders. I urge the respective industry bodies of India, the World Economic Forum’s Partnering Against Corruption Initiative and other stakeholders to work to that end.

Given the growing public awareness and discontent due to corruption and the need to restore India’s credibility on the world stage, the best time to do it is now.

Author: Sachin Taparia is the Chairman and Managing Director, New Venture in Social Transformation and Member of the Advisory Board, TVS & Sons Limited, India

 This Article first appeared in the Mint Newspaper

Image: World Trade Centre complex in Mumbai REUTERS/Punit Paranjpe