Corruption

Corruption Is Costly — and Pervasive

Forty-two percent of the corporate counsel, legal, and compliance officers surveyed by AlixPartners last fall say they have stopped doing business with certain partners due to corruption risk, up from 32% in 2015. Thirty-one percent lost business due to corruption risk, up from 23% the year before, and 37% pulled out of or delayed an acquisition due to corruption risk, compared with 36% in 2015.

Executives in the AlixPartners survey also indicate that it is becoming tougher for their companies to steer clear of potential corruption. About two-thirds (67%) of respondents believe there are some geographies where it is impossible to avoid corrupt business practices: Russia (35% of respondents), the continent of Africa (33%), and China (27%) top the list. In Russia and Africa in particular, CFOs shouldn’t expect the situation to change anytime soon: Africa has the worst anticorruption laws, according to 81% of respondents, followed closely by Russia (73% of respondents).