The Basel Institute has secured a new grant to partner with leading pharmaceutical company Novartis to improve the effectiveness of compliance programmes in deterring corrupt behaviour.

The two-year project is part of a larger initiative funded by the United States Agency for International Development (USAID) through its Countering Transnational Corruption Grand Challenge Doing Business with Integrity programme. This programme aims to incentivise the private sector to play a leading role in the development, application and scaling of innovations to counter transnational corruption.

Improving the effectiveness of compliance programmes

Multinational corporations are exposed to corruption risks as part of their global operations. They often operate in challenging contexts where particularism and informal transactions can undermine formal and legal frameworks and regulations.

The past decade has seen the emergence of many corporate anti-corruption compliance systems designed to mitigate these risks. However, measuring the effectiveness of such compliance programmes remains a challenge. And without proper evaluation, companies can fall into the trap of “cosmetic compliance”.

This collaborative project will address the evidence gap on the effectiveness of compliance trainings, and test innovative ways to improve effectiveness based on behavioural science.

Turning the behavioural lens on compliance

This project will draw on emerging research showing that individuals’ behaviour in high corruption-risk situations is based on their beliefs about social norms. This includes both social norms within a company (i.e. the corporate ethos) and social norms that influence staff and suppliers outside the workplace.

Fostering an environment where the social norm favours integrity is therefore essential to ensuring the success of compliance programmes.

By applying social norms insights to compliance training programmes, the project aims to add to the toolbox of compliance strategies that can be adapted to other industries and regions around the world.

Testing, designing and evaluating for greater impact

The Institute’s Prevention, Research and Innovation and Private Sector teams will work with Novartis to test different approaches aimed at shifting the social norms surrounding corruption in supply chains in Indonesia and the Philippines.

The teams will initially identify and prioritise key issues that the behavioural science-enhanced integrity training efforts should address. Leveraging insights from the Basel Institute’s previous research on social norms in East Africa, they will then develop integrity training pilot programmes that aim address these biases.

The pilots will harness peer power through a participatory, employee-led approach, which has been effective in previous interventions.

A multi-stakeholder, inclusive approach

The project is shaped using a Collective Action approach, which helps ensure that all relevant stakeholder groups are included and fosters collaboration among participants.

This will help ensure the scalability and replicability of the pilot project throughout the supply chain in low or middle-income target countries and across different industries.

A global, cross-industry effort

Over 100 grant applications were received for the Doing Business with Integrity innovation programme. Of these, 10 were selected to receive a total of USD 3.8 million in grants and in-kind support.

Some examples of other projects selected for funding are:

• a partnership between State Capture: Research and Action and private-sector partner, Corisk, to assess the performance and compliance of governments and companies in select countries to enforce sanctions against Russia;
• a project to tackle maritime corruption and its transnational elements implemented by the Maritime Anti-Corruption Network, with the support of more than 200 private-sector members; and
• a task force on interoperable beneficial ownership data by Open Ownership in partnership with LSEG Risk Intelligence and the Global Coalition to Fight Financial Crime.

Success in the fight against corruption requires a global response that engages the private sector in effective, efficient and sustainable partnerships with civil society and the public sector.

These innovative programmes will demonstrate the key role of the private sector in preventing corruption. They will also show to the wider business community that long-term, thoughtful anti-corruption programming is an essential good business practice.