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China has improved in its efforts to combat corruption and bribery in the workplace, but it is still lagging behind the global average.
Earlier this year, a number of large Chinese companies were found to lack disclosure of their corruption prevention measures, but a new report by Control Risks has found emerging markets are making more of an effort with anti-corruption efforts, with improvements noted across China, Brazil, and India.
The study used three parameters to determine successful compliance – investment in strong leadership, consistency in messaging as well as action, and a willingness to resist bribery.
Companies in China are starting to lean towards internal audit and benchmarking, with 5.9% having conducted an investigation of this sort.
One in 10 said they had conducted an investigation as a requirement from a regulator in the last two years (9.8%). As an example, the report cited the prosecution of the UK-based pharmaceutical company GSK’s subsidiary in China, which was fined £297m for malpractice.
The study also highlighted the cause of whistleblowers, finding that multiple lines of communication will help employees “seek advice, raise concerns and – in the worst case – report suspected malpractice.”
Although one in every three Chinese companies have a confidential whistleblowing line (phone or internet-based), they lag behind the global average of 56.1%.
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“In China, internal whistleblower complaints are becoming more common and, against a background of closer scrutiny from both domestic and international regulators, it is crucially important that companies follow up on any warning signs from this source,” it said.
The last aspect, willingness to resist bribery, continued to be a weak spot for emerging economies.
Approximately a quarter of respondents across India, Mexico, and China agreed that “so-called facilitation payments – small payments to speed up legitimate government transactions – are essential to keep their business going”.
One of the major problems all respondents cited was “dealing with local protection laws” (69.5%), which is particularly true in China.
“The challenge of navigating local data privacy laws adds a further layer of complexity to international corruption investigations. What might be considered open economic information in other countries is often regarded as a ‘state secret’ in (China),” the report quoted.
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