3 ways to fight corruption and restore trust in leadership

As we identify the paths necessary to come out of this compounded COVID-19 crisis and prepare the conditions for a much-needed Great Reset, we must also keep the focus on long-standing challenges that will affect this recovery - most notably the fight against corruption and the search for greater trust and integrity in institutions across social, economic and political systems.

We have a unique window of opportunity to get recovery right and create a sustainable society if we put good governance, transparency and accountability at the heart of all efforts and realize “stakeholder capitalism” - an economy that serves the interests of all.

Having an uneven playing field impedes economic growth, contributes to social inequality and obstructs innovation, among many other negative effects. It is estimated that the annual costs of corruption at a global level amount to $3.6 trillion. About $1 trillion of that is paid in bribes every year. These amounts can dilute the impact of the approximately $10 trillion that has been pledged and is starting to be deployed as part of the recovery and stimulus packages.

But this is not only a story of money. In many cases, the loss of lives can be traced to corruption. Some estimates indicate that about $500 billion of healthcare expenditure is lost to corruption every year. This has an impact on the production and procurement of medicines and medical equipment, jeopardizing their timely delivery where they are most needed.

As everyone around the world places their trust and hopes in the production and distribution of a vaccine to defeat the pandemic, we need an effective approach to make sure corruption does not get in the way of an equitable distribution of vaccines. We must double down on our efforts individually, certainly, but we should not forget this is a collective challenge. We can move the needle and achieve scale only if we work together.

Here are three actions that can make a difference in overhauling our anti-corruption approach.

Technology has emerged as one of the greatest allies of transparency and a critical tool against corruption. Three technologies, in particular, stand out for delivering value for businesses and governments to safeguard the primary points of vulnerability: blockchain, big data analytics and artificial intelligence (AI).

Advanced analytics and AI generate insight that can be used to better deter, detect and reveal corruption. According to Gartner, data analytics is reaching its “slope of enlightenment.”

In the case of Blockchain, the World Economic Forum partnered with the Interamerican Development Bank and the Colombian Inspector General’s Office to develop a very comprehensive study tackling how blockchain technology can be used to fight public sector corruption in public procurement processes. This study clearly confirmed the value of blockchain for increasing transparency and accountability in public procurement.

Other opportunities are currently being explored by the Center for the Fourth Industrial Revolution and PACI’s Tech for Integrity platform.

The climate emergency has resulted in a lot of attention on the environmental element of ESG (environmental, social and governance) reporting. Yet the “G” must be treated with a sense of urgency and priority as well. Without effective governance, we may fall short on the delivery of everything else. Let’s remember Enron and the 2008 financial crisis.

Just last September at the Sustainable Development Impact Summit, the World Economic Forum released a set of universal ESG metrics for business reporting. These 21 core metrics and 35 expanded metrics are organized across four pillars - governance, planet, people and prosperity - and serve as a roadmap for aligning business performance with stakeholder interests.

Under governance, anti-corruption represents one of the core metrics for reporting sustainable value creation. As you know, “what gets measured gets done.” We believe these metrics will be a key to achieving the SDGs. Investing more efforts on the “G” piece helps build a solid integrity culture which is one of the foundations of fighting corruption.

It is great and necessary that organizations work internally and on their own, and they should continue to do so. But these issues are too complex, inter-related, without boundaries and the scale and impact required cannot be achieved by a single organization or stakeholder group.

Through its Global Future Council (GFC) on Transparency and Anti-Corruption, PACI accelerated the implementation of the Agenda for Business Integrity, a four-pillar framework formulated by experts from different sectors that sets the tone for businesses on how to improve integrity. PACI is leading on collective action initiatives, for example on enlisting gatekeepers in the fight against illicit financial flows. In collaboration with the GFC, the UNODC-World Bank StAR Initiative and professional Gatekeepers, PACI is currently developing a "Unifying Framework" of practices and policies, which aims to coordinate and harmonize gatekeepers’ response to illicit financial flows.

Moving forward, effectively tackling the issue of corruption requires systemic thinking and collective action across multiple stakeholder groups.