The Wise Power of Ethics

Session 4: The Tao of Corruption

 Is Business corrupted?

Is your company corrupted?

Are you corrupted?

Perspectives at the Ethical Grey
Zone
Consequentialism: Consequentialism:
Harm towards others Benefit towards others

Deontology: Deontology:
Violation of a law, a Respect of a law, a code,
code, a principle, a rule, a principle, a rule, a
a standard… standard…

Virtue: Bad Good

Virtue:
Violation of values and Adherence to values and
sense of integrity sense of integrity

Communicational: Communicational:
Secret or confidential Open and transparent

If we analyze an action according to the different ethical theories and in both the positive and
negative perspectives, then all actions are, to some extent and in some sense, good and bad at the
same time.
The two sides of good and bad combine to motivate a behavior. It cannot be properly analyzed,
both from a moral and a strategic intend, by looking only at one side.
Examples of Corruption?
Example 1:
“Mr. N. has been elected President on Sunday. He spends Monday and Tuesday on the yacht of his
friend, the President of a large industrial group. Is this corruption?

Example 2:
“The President of a Union of countries has been instrumental in solving the solvency crisis of one of
the country of the Union. A private bank has been a key partner to the solution. At the end of his
term, the President joins the bank. Is this corruption?

Example 3:
“M. is a company selling a product that has adverse effects on the environment. It is contributing
$200 000 to the campaign of a Senator. Once elected, the Senator votes against a law regulating
the sales of the product produced by M. Is this corruption?

Example 4:
“Company A. wants to acquire company B. The Chair of A. invites the Chair of B. to play golf and
intends to evoke the idea. Is this corruption?
 The Grey Zone of Corruption (1)

Corruption Integrity

“Mr. S. has been elected President on Sunday. He spends Monday and Tuesday to rest on the
yacht of his friend, the President of a large industrial group.”
Is this corruption?
Yes in the sense that his friend makes him a private favor that may influence his public
role.
No because this is not illegal (Mr. S. insists he has paid nothing).
Is this good or bad?
Bad because it may influence the fair allocation of public contracts
Good because it will strengthen his industrial strategy
 The Grey Zone of Corruption (2)

Corruption Integrity

“The President of a union of countries has been instrumental in solving the solvency crisis of
one of the country of the union. A private bank has been a key partner to the solution. At the
end of his term, the President joins the bank.”
Is this corruption?
Yes in the sense that the bank may return a favor.
No because the hiring occurred after a period of 6 months.
Is this good or bad?
Bad because it shows that money has preeminence over politics.
Good because it values the expertise of the President.
 The Grey Zone of Corruption (3)

Corruption Integrity

“M. is a company selling a product that has adverse effects on the environment. It is
contributing $200 000 to the campaign of a Senator. Once elected, the Senator votes against
a law regulating the sales of the product produced by M.”
Is this corruption?
Yes because a public role is biased towards a private gain.
No because the donation is publicly known.
Is this good or bad?
Bad because the environment is harmed.
Good because it preserves the jobs of company M.
 The Grey Zone of Corruption (4)

Corruption Integrity

“Company A. wants to acquire company B. The Chair of A. invites the Chair of B. to play
golf and intends to evoke the idea.”
Is this corruption?
Yes in the sense that it involves private individuals for a major company deal.
No because nothing concrete is intended to be discussed.
Is this good or bad?
Bad because the Chair is out of control from the board.
Good because it may be the first step of a successful deal.
 Changmaï
David Mc Leod has been the new General Manager of the Changmai plant for the last 6 months. He did a lot to
improve the environment, health and safety conditions of the plan.
Still, for the annual inspection, the inspector Mr. Laï points at two unsolved issues that can prevent the granting
of the licence.
In passing, Mr Laï indicates that he would like to go to Lourdes, to accompany his wife on a Christian
pilgrimage. Also, his son has newly graduated and is looking for a job.
David really wants to increase production and put the plant to standard.
You are David Mc Leod, what do you give to Mr. Lai?
1. A ticket to Lourdes
2. A job for his son
3. Both
4. Nothing
Why?
 Why corrupting?
A “good” report ?
Giving

A “bad” report
Not giving

We give because we think it is in our interest. While we benefit, we

1. We resist admitting the ethical issue (denial)

2. We insist on our good faith (justification)
3. We discard the alternative and tend to blame others (externalization)

We face the ethical risks. In the worst case, we lose on both ethics and
interest
 How to resist the temptation?
A “good” report ?
Giving

A “bad” report
?
Not giving

We resist corruption because we want to respect our values and are able to
convince others of an opportunity
1. We are aware of the ethical dimension (Acknowledgment)
2. We anticipate the ethical risks (Prudence)
3. We imagine an opportunity (Vision)

We face economic risks. In the best case, we win on both ethics and interest
 Possible Arguments for NOT
corrupting

Why not
Corrupting?
a “bad” report?

It
Officials
reflectsandreality
your boss will know
You
Whyare if itnot
appears
responsible
in the press?
of the past
You are
will here
pay more
to change
and more
things
You need
will feelnewtrapped
investments
You want
will betopart
double
of aproduction
corrupted system
You are
maymotivated
be caughtto fight
It
Youmay
willbelose
time
motivation
to stop working for a crook
You will lose meaning

We should try to spend more time on this side rather than on denial, justification and
externalization: corruption should always be a lost battle…
 Political & Economic Corruption
Trans
Relation
action
Political corruption refers to the
inappropriate influence of a relation over a
transaction.
The transactional dimension is taken as the
non-corrupted reference.
Negative consequences are termed as sub-
optimal outcome for the transaction.
Trans
Relation
action
Economic corruption refers to the
inappropriate influence of a transaction over
a relation.
The relational dimension is taken as the
reference for integrity.
Negative consequences are termed as a loss
of political or social integrity.
 Relation, Transaction &
Corruption
A transaction
The integrity of a transaction resides in the
transparent and competitive exchange of a
private good and service of a given price and a
given quality among anonymous and atomistic
actors.
A transaction intends to be objective.
A relation can corrupt a transaction by making
it less efficient
but it can also improve it by enriching it with a
form of social trust
Corruption is the excessive influence exerted on an interaction
A relation
The integrity of a relation resides in the
intimate and cooperative sharing of a common
identity or experience between identified and
responsible actors.
A relation is essentially subjective
A transaction can corrupt a relation by
perverting its integrity
but it can also help by nurturing it with a form
of incentive
 Political & Economic Anti-
Corruption
Trans
Relation
action
For Donald Trump (2017), the rule of law serves
“to protect the individuals from government
corruption and abuse of power, allows families
to live without fear, and permits markets to
strive”.
In the search of a global environment based on
“democratic institutions”, corruption is
perpetuated by “Transnational Criminal
Organizations”, “corrupt foreign officials”,
“corrupt elites”, “repressive leaders [who] often
collaborate to subvert free societies and corrupt
multilateral organizations”.
Trans
Relation
action
For Xi Jinping (2017), “corruption is the greatest
threat our Party faces”.
It is one of the “tests confronting the party as they
relate to governance, reform, opening up, the
market economy, and the external environment”.
Xi Jinping wants to make sure “that officials are
honest, government is clean, and political affairs
are handled with integrity”.
The integrity of party officials will improve “the
political ecosystem of the party”, “strengthen[s]
internal oversight” as well as “its close ties with the
people”.
 Relation, Transaction & Anti-
Corruption

Donald Trump Xi Jinping

Donald Trump advocates anti-corruption to Xi Jinping advocates anti-corruption to make

influence the global playing field, protect the the Chinese Communist Party better so as to
U.S. interests and contribute to political contribute to the long term stability of the
freedom and fair economic competition. country.

But But

Donald Trump also uses anti-corruption to bias Xi Jinping also uses anti-corruption to assert
the global playing field in favor of the U.S. his own power over political adversaries

Anti-Corruption is also a way to exert power in a less overt manner

 Corrupted Anti-Corruption?
A transactional perspective on anti-corruption bears the risk of dehumanizing
social interactions. It somehow assumes global governance could rely on an
objective system of anonymous actors exchanging good and services for defined
price and qualities and under a transparent set of rules.

It can be used to undermine national sovereignty of countries or as an attempt to

impose a global hegemony of those controlling or benefiting from market
capitalism or its ideological discourse.

A relational perspective on anti-corruption bears the risk of idealizing social

interactions. It somehow assumes global governance could rely on a community
of actors sharing the same values, the same objectives the same methods and the
same manner to find meaning in existence.

It can be used to undermine individual freedom or as an attempt to impose an

opaque form of political power with authoritarian forms of thinking or
interacting.
 Conclusion
Corruption and anti-corruption necessitate an acute analysis of the good and evil of social
interactions, and that such an analysis will lead to necessarily contradictory judgments
due to the complexity at hand.

For instance, it is necessary to study the policies for fair competition promoted in
Chinese laws or the web of Chinese foreign investments to also understand how Chinese
market capitalism also shape the global economy.

And it is necessary to study the relations among individuals, families, institutions and
corporations in the United States and the strategy of extraterritorial jurisdiction to
understand how American structures and strategies of different sorts shape global politics.

For instance, it is because foreign companies will strictly comply with the rules and
regulations imposed by other countries that they are going to be even more vulnerable to
selective and strategic anti-corruption offensives.

It is because companies will fail to value the legitimate importance of political relations
that their non-market strategies may backlash and that they can lose their license to
operate.
21
Joan Miro, 1968
To some extend and in some sense, all behaviours are corrupted and not
corrupted at the same time.

Therefore, anti-corruption is, to some extent and in some sense, corrupted.

So what?

 At the scientific level, it is possible to have a rigorous analysis of equivocal constructs even though
such analysis does not reduce itself to categorical judgements or systematic predictions.

 At the global level, ethics, in particular through corruption and anti-corruption (but not only), is a key
element of the global dynamics of power and of the evolution of “the rules of the game” for business.

 At the board and company level, it is not enough to protect oneself by complying to a version of a
“zero tolerance” approach to corruption. It may even be a way to increase risks and nurture delusion.

 At the individual level, it is recommendable to analyze corruption and anti-corruption in a multi-

perspective manner and not be entrenched in a way of thinking that is either comfortable or imposed.