Earlier this week I wrote about poverty: how its brutal reality makes corporate compliance programs so difficult to implement, because people in emerging markets (foreign officials and employees alike) need to take bribes to survive. Bribery is a necessity as much as it is a blight on progress.
That column got plenty of attention and comment on Twitter, LinkedIn, and elsewhere. Some people did rightly point out that higher salaries alone will not end the endemic problem of bribery; better regulations for free trade, a culture that values the rule of law, and firm anti-corruption discipline among corporations are all just as important, they said. I agree.
Still, by coincidence, recently I’ve also been inviting European compliance professionals to attend our upcoming Compliance Week Europe conference in Brussels. I invited one government official from a country in southeastern Europe. Her reply speaks volumes to the challenge of eradicating bribery:
Matt,
I would love to attend such high-level event. Unfortunately I cannot afford the expenses.
As you might know, we are one of the poorest countries in Europe. The average salary is nearly €400 per month. The state sector is underpaid; in my case the salary is around €800 (annually just under €10,000). I also have three kids.
If the employer doesn’t think people are a valuable asset then you don’t receive any support for such conferences. So this is the reality. Nobody will invest in me. I do that by myself all the time. You cannot imagine how hard it is sometimes.
I would very much like to relocate in another country in EU (especially the U.K.; London as it is the biggest financial center and they seek for professionals like me)… If I change the employer and I go abroad I will inform you and I will do my best to participate in this high quality event as I would love to attend it and meet new peers.
This woman is a banking inspector with more than 15 years experience. She also belongs to the Institute of Internal Auditors and the Association of Certified Fraud Examiners. This is not the sort of foreign official who needs more training on what a bribe is, or why accepting bribes is unethical; she has all the credentials of any compliance professional in the West.
She is also trying to raise a family while earning less than $12,000 a year. Even presuming she has a husband who earns some similar amount (I have never met her and have no idea what her personal circumstances are), that family of five would still fall below the U.S. federal poverty guidelines, which is $28,410 for a family that size.
To be clear: this particular woman strikes me as a foreign official who would not seek bribes. But she is a real example of the challenges that corporate compliance officers face, because there are plenty other foreign officials in her country who earn the same low salary she does—and some portion of them will want bribes. Others won’t want to take bribes for personal gain, but have no choice because other supervisors will insist that they take bribes (which go straight to the supervisor) or be fired. The situation is just as true for private sector employees in emerging markets as it is for foreign officials.
Would you want to face unemployment if you were in that circumstances? I wouldn’t. That risk can be much more urgent than any ethics training or due diligence certifications, and it’s one that billions of people around the world face every day. We must always remember that.
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