Kathryn Gordon

Business Approaches to Combating Bribery: A Study of Codes of Conduct

The question of what firms do internally in the fight against bribery is probably as important to the successful outcome of that fight as formal anti-bribery law and enforcement. This paper looks at corporate approaches to anti-bribery commitment and compliance management using an inventory of 246 codes of conduct. It suggests that, while bribery is often mentioned in the codes of conduct, there is considerable diversity in the language and concepts adopted in anti-bribery commitments. This diversity is a feature of the language used in describing parties to bribery and in defining which activities are prohibited (e.g. promising bribes versus actually giving them, gifts and entertainment, and solicitation. This diversity of language and concepts suggests that it might be useful to extend and deepen efforts in business associations and international organisations to build consensus on the meaning of bribery and corruption. In contrast, the bribery codes show evidence of an emerging consensus on managerial approaches to combating bribery. This involves the deployment of a distinctive mix of management tools, including financial record keeping, statements by executive officers, internal monitoring, whistle-blowing facilities, creation of compliance offices and threats of disciplinary action.

Marginal Effective Tax Rates on Physical, Human and R&D Capital

This paper presents marginal effective tax rates (METRs) for a number of physical and intangible assets and for a number of funding sources. The assets include machinery, buildings, inventories, investments in short-lived R&D (that is, investments whose returns last only a few years) and in long-lived R&D (whose returns last many years). Two human capital assets are included -- firm-sponsored training and household-sponsored tertiary education. The calculations incorporate parameters from both the personal and corporate tax codes. They are performed for the “top-bracket” taxpayer and for the “average production worker” and cover between 15 and 22 countries, depending on data availability. The OECD has already used the King-Fullerton method to calculate METRs for physical capital (OECD, 1991) and this paper updates these calculations using established practices. As the method has not yet been applied to household-sponsored human capital, the paper describes the extension to this ... Cet article presente les taux d’imposition marginaux effectifs (TIME) pour un certain nombre d’actifs corporels et incorporels et selon leur mode de financement. Ces actifs comprennent les machines et biens d’equipement, les immeubles, les stocks, les investissements en recherche-developpement a rentabilite courte, les investissements en recherche-developpement a rentabilite longue, la formation financee par l’entreprise, la formation universitaire financee par les menages. Les calculs font appel a des parametres du code fiscal des personnes physiques et a celui des societes et sont realises pour le contribuable taxable a la tranche superieure de l’impot et pour l’ouvrier moyen. Ils concernent entre 15 et 22 pays selon la disponibilite des donnees. L’OCDE a deja utilise la methode King-Fullerton pour calculer les TIME pour le capital physique (OCDE 1991) et cet article met a jour les calculs precedents en utilisant des pratiques bien etablies. La methode n’ayant pas encore ete ...

Corporate Responsibility Practices of Emerging Market Companies

Emerging market companies make up 3.8 per cent of the FT500, the 500 largest global traded companies1 and 4.6 per cent of the Dow Jones Global Index of 2,500 companies. OECD statistics show that, while the bulk of international investment flows originate in the OECD, non-OECD countries are increasingly important sources of investment flows. This paper presents a fact finding study of the...

Environmental concerns in international investment agreements: The "new era" has commenced, but harmonization remains far off

In Columbia FDI Perspective No.37, Daniel M. Firger foretells “a new era characterized by profound harmonization” between climate change policy and international investment law, based on what he sees as “unmistakable signs of convergence” in recent investment treaty making. 1 A study just released by the OECD suggests that convergence of investment treaty making toward environmental policy began about a decade ago, but also that “profound harmonization” of investment and climate change policy is still some time away. 2

Business Approaches to Combating Bribery

Bribery is becoming a high priority public concern and the legal framework and enforcement apparatus used in the fight against it are being developed in the OECD and elsewhere. Reflecting these civic and legal pressures, firms now often deal with bribery in their codes of corporate conduct – public statements of commitment to abide by a certain standard of business conduct. The question of what firms do internally in the fight against bribery is probably as important to the successful outcome of that fight as formal anti-bribery law and as the attitudes of the public. This paper looks at corporate approaches to anti-bribery commitment and at managerial approaches to implementing these commitments in an inventory of 246 codes of conduct.The paper shows that, while bribery is often mentioned in the codes of conduct, there is considerable diversity in the language and concepts adopted in anti-bribery commitments. This diversity is a feature of the language used in describing parties ...

Rules for the Global Economy

This paper explores the differences, similarities and synergies between voluntary and binding approaches to international rules. Voluntary efforts to ensure that firms adhere to appropriate standards of business conduct have been an important recent development in international business. These efforts have included the publication of codes of conduct describing the nature of a firm’s commitments in such areas as environment, labour, product safety and bribery as well as implementation of specialised management systems designed to help firms honour these commitments. Yet, some NGOs and labour unions question the credibility of these efforts and wonder whether initiatives that do not have the force of law can ever be effective.This paper notes that all approaches to the social control of business organisations – voluntary and legally binding -- have distinctive shortcomings. These include problems of: credibility arising from imperfect monitoring and enforcement; capture of the control ...

Multilateral Influences on the OECD Guidelines for Multinational Enterprises

The OECD Guidelines for Multinational Enterprises (the “Guidelines”) are one of many intergovernmental instruments that seek to promote economic, social and environmental progress. The OECD Guidelines do this by establishing concepts and principles for responsible business conduct that help “to ensure that the operation of [multinational enterprises] is in harmony with government policies, to strengthen the basis of mutual confidence between enterprises and the societies in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable development...

Deciphering Codes of Corporate Conduct

Evidence of public concerns about globalisation is pervasive -- in the newspapers, on the Internet and more formal discussions of public policy. The business community has been attempting to position itself with respect to these concerns. Indeed, voluntary efforts to define and implement appropriate standards for business conduct constitute one of the more prominent managerial developments in recent years. These efforts have also often involved significant contributions from NGOs, governments and intergovernmental organisations.The issuance of voluntary codes of conduct has been an important facet of these developments. Such codes are voluntary expressions of commitment made by an organisation to influence or control behaviour for the benefit of the organisation itself and for the communities in which it operates. Private companies and associations of companies have issued such codes, calling them codes of conduct, ethics statements or guidelines, in response to both internal and ...

Policy frameworks for SWF investments: OECD and host-country perspectives

Working in parallel with the International Forum of Sovereign Wealth Funds, the OECD has developed a framework for recipient country policies towards SWF investments promoting openness, non-discrimination, transparency and restrained and disciplined use of investment measures related to national security. This framework can be viewed as the host-country counterpart to the SWFs’ Santiago Principles – together they form an emerging framework of international norms governing SWF investments. The purpose of the chapter is, first, to describe the OECD guidance and then to take stock of where recipient countries are in terms of living up to these commitments since they were formally adopted in early 2009. There are four key findings. First, most countries have maintained formal policy stances that are largely receptive to international investment in general and to SWF investments in particular. This means that de jure, investment policies have tended to become more open, more transparent and less discriminatory to foreigners and non-residents and SWFs have benefitted. Second, although national security concerns are an ever more prominent feature of host country policies vis-a-vis inward investments, SWFs have continued to occupy a relatively low profile in this area (and this, despite the fact that state-owned enterprises in the broader sense have attracted significant attention in security-related investment reviews). Third, emergency measures taken during the crisis – mainly in the financial sector, but also in others such as automobiles and green’ sectors – create considerable discretion in policy making. These measures are not always discriminatory against foreign investors – indeed, they were often favourable to them in the sense that foreign investors, including SWFs, were often selected as partners in rescue operations for domestic firms. They nevertheless pose challenges for existing international investment disciplines – these discretionary, one-on-one relationships between governments and investors, be they domestic or foreign, are inherently difficult to subject to international rules. This review concludes that the biggest current threat to openness to SWF investments (and indeed open global capital markets in general) resides in less transparent, more discretionary public policies that have assumed even greater importance during and since the crisis (e.g. subsidies, prudential supervision and informal arrangements). International economic diplomacy is going to have to become much more intensive and smarter if it is to succeed in constraining governments’ ability to abuse their newly created discretionary powers.

Fighting against Corruption: The Japanese Approach to Reform Corporate Governance

The legal framework and enforcement apparatus used in the fight against bribery are being steadily improved in many countries. The public and private sectors in Japan have participated in this trend. This chapter provides an overview of changes in the anti-corruption legal framework and a snapshot of corporate initiatives to fight against corruption in Japan.