How can management enforce anti-corruption policies overseas?

Singapore businesses have been commended for successful enforcement of anti-bribery policies in their satellite offices in Malaysia.

According to government sources, arrests for graft or corruption cases involving Singapore firms in Malaysia have been negligible.

The international corruption scandal involving Keppel Corporation has dominated headlines recently, bringing the ethical practices of Singapore companies abroad into the spotlight.

Singaporean HR leaders looking to drive ethical practices across the region face significant challenges. Many of Singapore’s major trading partners, including Malaysia, were ranked in the bottom half of 176 countries rated by graft watchdog Transparency International’s Corruption Perceptions Index for 2016.

However, at a business-to-business level, Malaysia and Singapore typically have similar corporate policies on gifts and entertainment. Singapore firms operating in Malaysia are also bound by strict anti-bribery laws at home, said Mr Adib Zalkapli, senior associate at corporate advisory Vriens & Partners.

“Companies can survive and do well in Malaysia without resorting to bribery,” Adib told The Straits Times. He points out that times have changed since the 1990s with regards to business dealings between corporations and the public service.

In the case of the Keppel scandal involving Brazilian payments, which resulted in a fine of USD422m, corporate governance advocate Mak Yuen Teen suggested that a company’s board cannot just rely on information provided by management, especially when third-party agencies are involved.

“Group compliance and internal audits, audits of third parties, on top of code of conduct (and) whistle-blowing policies need to be in place,” he said. “But setting realistic budgets, balanced reward systems, are also important.

“You can put in all the policies you want. But if someone’s job or bonus is on the line, they may still do what it takes.”

During yesterday’s parliament session, Senior Minister of State for Law Indranee Rajah said the government does not tolerate corruption and was "extremely disappointed" at the scandal.