Government integrity holds key to tackling corporate corruption - study

Government leaders must set a good example to the business community if they want to eliminate corporate corruption, a new study reveals. Financial incentives and criminal punishment will not root out corrupt business practices, but a government culture of honesty, integrity and strong leadership could help to cure corruption. University of Birmingham researchers discovered that corporate governance choices made by business leaders are directly related to government integrity. Dishonest practices are more likely in states where the government operates in a way that is dishonest or unethical. Professors Amon Chizema and Ganna Pogrebna , from Birmingham Business School , examined World Economic Forum data from 2011 to 2018 on small, medium and large companies in agriculture, manufacturing and non-manufacturing industries - such as mining and quarrying, utilities and construction - as well as services with headquarters in 93 countries. The researchers published their findings in The Leadership Quarterly, also demonstrating experimentally that leaders were more likely to make honest decisions and abstain from bribery and tax evasion when asked what a good leader would do in a particular business situation. Professor Pogrebna commented: "This simple solution of asking 'what would a good leader do' had a much higher positive effect on leadership integrity than changing financial incentives or increasing the propensity of being caught and punished by the law.