To tackle the increasing menace of corporate corruption, one of the major roles has to be played by Government leaders – a new study has shown.
According to researchers, leaders should take the first steps and set a good example to the business community if they want to eliminate corporate corruption. Government culture of honesty, integrity and strong leadership could go a long way into curing corporate corruption disease.
University of Birmingham researchers discovered that corporate governance choices made by business leaders are directly related to government integrity. Dishonest practices are more likely in states where the government operates in a way that is dishonest or unethical. The researchers published their findings in the Leadership Quarterly, also demonstrating experimentally that leaders were more likely to make honest decisions and abstain from bribery and tax evasion when asked what a good leader would do in a particular business situation.
When listing most important values in the desirable leadership culture, experimental participants named “credibility” as the most important characteristic of a good leader. Experimental study results demonstrate that Chief Executive Officers (CEO) are more likely to cheat in a corrupt environment than in a transparent one.
Beyond the question of corporate governance, the researchers have unveiled weaknesses in current anti-corruption practices within the business environment.
Where government integrity is low, the corruption problem arises from a gap between what is right and what is mandated by law. This gap may be bridged by instilling acceptable social norms in corporate leaders.