3 Common Pressures That Cause Business Corruption
In-house attorneys can often be asked to help out when corruption rears its ugly head. Generally, apart from just sheer greed, corruption in business results from individual employees, or high ranking managers or officers, facing pressures that cause them to cut corners, hide facts, or manipulate data, for their own benefit. In its worst form, employees embezzle, steal, and engage in corporate espionage. At best, if this stuff is happening, you'll have a toxic culture.
Below you can read about three common pressures, both internal (to the business) and external, that can result in business corruption.
1. Are Performance Based Incentives Too Tempting?
If compensation and incentives are tied to meeting performance goals, employees, or whole teams, may be tempted to fudge the numbers as to their, or the whole company's, performance. Generally, if a company is going to have performance based incentives and compensation, the data used to assess should be closely monitored and easily verifiable. Notably, according to the scholars over at HBR, "performance-based pay can actually have dangerous outcomes for companies that implement it."
2. Are Consequences Too Harsh?
Conversely, when consequences are overly harsh, employees can quickly turn on each other when trying to pass the buck, hide the ball, or do whatever it is people who are afraid of consequences do. Not surprisingly, employees will lie to avoid discipline, particularly if the discipline is viewed as excessive, or having long-term or financial consequences.
3. Employee Life Pressures
People deal with a whole host of pressures in their day to day lives. And when familial, or personal financial, pressures mount, even the best of lawyers can be tempted to go full Heisenberg and live their own version of Breaking Bad. Just ask the former DOJ attorney turned inmate (as a result of some rather corrupt lawyering) Jeffrey Wertkin. Wertkin was facing extreme personal pressure as he pretty much had his whole life fall apart. As a result, he tried to make some easy money via selling confidential information (albeit while suffering from a substance abuse problem), which then resulted in real legal consequences for him, and some goodwill problems for his new BigLaw employer.
Related Resources:
- What GCs Can Learn from FIFA's Bribery and Corruption Scandal (FindLaw's In House)
- How to Assess Corruption, Bribery Risks When Doing Business Abroad (FindLaw's In House)
- The Rolls-Royce (of) Foreign Bribery Scheme(s) (FindLaw's In House)
