Corruption does serious harm. Businesses’ involvement in corruption is often associated with human rights abuses, organised crime and anti-competitive practices. The impact of this is ultimately borne by the most marginalised and vulnerable in society. For companies themselves, corruption costs:  losses in operations, the value of the bribes paid, lost productivity, inefficiency in governance, and undermining vital intangibles like the business value of reputation and ultimately its social licence.   

Companies therefore need to be able to detect and prevent corruption within their operations. Identifying which of activities have the most impact in reducing the risk of corruption, enables companies to develop an anti-corruption programme that genuinely works. In this endeavour, measuring effectiveness is key.

Emerging expectations from regulators are also driving companies to measure the effectiveness of their approach to anti-corruption. Investors, consumers and employees also want to know, and see, that the company is indeed a responsible business that takes the risk of corruption seriously.

Transparency International UK’s new report, Make it Count, finds however that many companies do not know if their approach to anti-corruption is working. This report helps to both fill this gap, exploring practical approaches to measuring the effectiveness of anti-corruption programmes. By measuring effectiveness, companies can identify whether their resources are being well deployed and where attention should be directed for maximum impact, efficiently.

What does this look like?

In researching this report, we carried out a comprehensive analysis of the existing literature in this area and conducted a series of in-depth interviews with anti-corruption professionals from major multinationals, academics, regulators and others. Our research focused on measuring effectiveness in four key areas of companies’ anti-corruption approaches: top-level commitment, risk assessment, third-party management, and training. In each of these topics we examined two distinct types of measures: activity metrics and impact metrics.

• Activity metrics record raw activity. Typically, these represent efforts undertaken as part of the company’s anti-corruption programme, but may also include responses to corruption incidents and other events.
• Impact metrics evidence the extent to which the company is succeeding in achieving the intended impact of the anti-corruption activity. An example would be data that facilitates measuring changes in understanding or behaviour (the impact) attributable to a company’s anti-corruption training (the activity).

Lessons to be learnt from challenges faced

We found that interviewees who participated in our consultation find it challenging to develop impact metrics that allow them to test whether their anti-corruption approach is achieving its intended aims: to prevent, detect and respond to corruption incidents or increases in corruption risk.

In our report we explore methodological, organisational and practical challenges and indicate solutions for how companies can overcome them. For example, one methodological challenge is knowing how to establish a causal connection between activity and impact. Corruption incidents are relatively rare which means it can be hard to establish statistically reliable cause and effect patterns, particularly when undertaking a more data-driven analysis.

The report highlights several cross-cutting methods that companies can use to assess the overall effectiveness of their anti-corruption approach across several areas of the anti-corruption programme. This presents solutions for companies to develop appropriate methods for collecting these metrics. These include: monitoring with data analytics; employee surveys; staff interviews, workshops and appraisals; multidisciplinary collaboration; audit and assurance; and benchmarking.

Many interviewees also highlighted the importance of multidisciplinary teams comprising individuals from different business functions (e.g. finance, internal audit, human resources, and sales).

Currently, the use of metrics to evaluate anti-corruption approaches is still fairly elementary. The focus to date has largely been on activity or process-based metrics rather than impact metrics. The findings in Make it Count are intended to foster greater knowledge-sharing in relation to the measurement of anti-corruption programmes aimed at enhancing their effectiveness, and to spark discussion on how to advance practice in this field. We look forward to working with companies, investors and others to make this happen.

Transparency International UK therefore calls on:

• Senior business leaders to recognise that it is possible to measure anti-corruption programme effectiveness and to empower relevant departments to implement steps to analyse the impact of their approaches.
• Investors to require the companies in which they invest to measure the effectiveness of their anti-corruption approaches.
• Anti-bribery and anti-corruption officers to use this research to learn how they can improve their own effectiveness measurement and work towards measuring the real impact of their anti-corruption approach.

Transparency International UK has long advocated that companies be as transparent as possible about how they are managing their anti-corruption risks. This research demonstrates the need for companies to also be open about how they are measuring the effectiveness of their approach. In this way, companies’ anti-corruption efforts can improve, good practice should become the norm, and effective approaches to prevent corruption would be established across all industries and sectors.