Companies sailing into choppy waters during the economic crisis could be tempted to relax their ethical standards, business leader Alan Boeckmann said Feb. 26 at Thunderbird School of Global Management during a discussion on the World Economic Forum Partnering Against Corruption Initiative that he helped launch in 2004.
“Corruption thrives when you have poverty and the ability to wield power for personal gain,” said Boeckmann, chairman and CEO of Fluor Corp., a global engineering and construction company based in Irving, Texas. “There are a lot of companies now that are being tested, that are sailing into choppy waters with cash flow problems. They could be tempted to do things that they otherwise might not do.”
Boeckmann said the construction industry offers significant opportunities for corruption, and he grew tired of competing against companies that don’t play fair.
“If you’re in a locale where it’s not only allowed and condoned, but in fact encouraged by local governments and so forth, you are disadvantaged,” he said. “The light went on when I saw a survey by Transparency International that declared construction as the second worst industry for corruption.”
Boeckmann decided to take action. He banded together at the World Economic Forum with a group of competitors and helped develop the Partnering Against Corruption Initiative, which challenges companies to abide by a set of guiding principles designed to stamp out corruption and bribery.
Several companies signed the pledge immediately, and today the movement includes 132 companies from several industries. Boeckmann said the initiative will help raise the standard of living in developing countries because foreign direct investment will increase as the costs of corruption decrease.
“The effects of corruption are real,” Boeckmann said. “It can lower the standard of living in a locale because of the lack of investment.”
He said the initiative also shows the power of collective action through organizations such as the World Economic Forum.
“As an individual you may not be able to do much,” Boeckmann said. “But when you band together in a critical mass and cut off the supply side of corruption, I think you can have a dramatic effect.”
He said Fluor has a long history of ethical behavior, but the process of developing the Partnering Against Corruption Initiative helped the company make several internal improvements. He said Fluor also has found new partners willing to take a stand against corruption.
In one international port that routinely asked for bribes, Boeckman said his company used its influence as a Fortune 150 company to change the climate. “With the support of our client, we let it be known that we were not going to pay bribes to get our equipment through customs,” he said.
Boeckmann said Fluor now operates routinely at the port without any problems.
“I think the initiative is starting to make a difference in a lot of locales,” he said. “We’ve got a good start, and we’re gathering a lot of momentum.”