Corruption is a form of dishonesty or a criminal offense that is undertaking by a person or an organization that entrusted in a position of authority to acquire illicit benefits or abuse power for one’s gain.
Corruption may involve activities like bribery, influence pedding,embezzlement and fraud as well as practices that are legal in many countries such as lobbying.
2. CAUSES OF CORRUPTION.
Regardless of the scale of the violation, whether it is petty corruption or multimillion-dollar scams, the motives behind committing such acts can often be attributed to a handful of factors. They are as discussed below.
1 L ack of transparency: When financial transitions and decision-making processes are opaque, it creates opportunities for corrupt practices to flourish.
2 Weak regulatory framework: Inadequate regulations or enforcement mechanisms can allow individuals and institutions to engage in corrupt activities with impunity.
3 Conflict of interest: Conflicts of interest among financial professionals, regulators, and policymakers may lead to decisions that prioritize personal gain over the public interest.
3 Greed: A culture that values profit maximization at any cost, by hook or crook, can breed unethical behavior and corruption within financial institutions.
4 Complex financial instruments; The complex nature of modern financial instruments can hide fraudulent activities under the mountain of digital data. This makes it easier for individuals to engage in corrupt practices.
5 Globalization: Cross-border financial transactions and regulatory differences in different jurisdictions create loopholes that can be exploited for corrupt purposes.
6 Inadequate oversights: Insufficient oversight and monitoring of financial activities provide ample opportunities for corruption to go undetected and unchecked.
IMPLEMENTING STRATEGIES TO COMBAT CORRUPTION.
Corruption can increase criminal activity and organized crime in the community when left unchecked. But there are a number of steps that can help to manage it.Here are steps to prevent corruption;
1.Educational: strong educational focus must reinforce best business practices and alert managers and employees to where to look for corruption.
2.Environment: A robust control environment reduces the risk of corruption, as do through background checks before hiring or promoting employees.
3.Accountability: When there are mechanisms in place, there is likelihood of reinforcing a culture that’s fosters strong ethical behavior while holding those to account who violate the norms.
4.Reporting: Making it easy for managers, employees, suppliers and customers to report corruption can reduce its further. It’s also important to ensure that those reporting are able to do safely and securely.
5.Regulation: Setting up codes of conducts and ethics can help avoid situations that can create conflicts of interest. This is common in areas like the financial industry, where chartered financial analysts and other financial professionals must adhere to these rules or be penalized.
