Bribe

3 key takeaways

• A bribe involves offering something of value to influence a person’s actions.
• It is considered illegal and unethical in most jurisdictions.
• Bribery undermines trust and integrity in institutions and businesses.

What is a bribe?

A bribe is an offer, promise, or giving of any financial or other advantage to another person with the intent to induce or reward improper performance of a relevant function or activity. It is a form of corruption that typically involves someone in a position of power, such as a public official or corporate executive, being influenced to act in a way that benefits the briber.

Bribery can take many forms, including cash payments, gifts, favors, or promises of future benefits. It is considered illegal and unethical because it compromises the integrity of decision-making processes and undermines trust in public and private institutions. Bribery is prohibited by law in most countries, and those found guilty of offering or accepting bribes can face severe penalties, including fines and imprisonment.

Types of bribery

• Active Bribery: Involves the act of offering, promising, or giving a bribe to someone to influence their actions.
• Passive Bribery: Occurs when an individual receives, agrees to receive, or requests a bribe in exchange for altering their actions.
• Kickbacks: A specific type of bribe where a portion of the payment made for a service or contract is returned to the person who awarded the contract or facilitated the service.
• Facilitation Payments: Small payments made to expedite or secure the performance of a routine government action, often seen as a form of bribery despite being tolerated in some jurisdictions.

Legal and ethical implications

Bribery is illegal in most jurisdictions and is considered a serious offense. Laws against bribery are enforced to maintain fairness, transparency, and integrity in public and private sectors. Key pieces of legislation that address bribery include the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. These laws not only prohibit bribery but also require companies to implement anti-bribery and corruption (ABC) policies and procedures.

Ethically, bribery erodes trust in institutions and damages the social contract. It creates an uneven playing field, where decisions are made based on personal gain rather than merit or fairness. Bribery can lead to poor governance, increased costs for businesses, and a lack of public trust in officials and institutions.

Consequences of bribery

Legal Consequences:

• Fines: Companies and individuals found guilty of bribery can face substantial fines.
• Imprisonment: Individuals involved in bribery can be sentenced to prison.
• Reputational Damage: Companies caught engaging in bribery can suffer severe reputational harm, leading to loss of business and trust.

Ethical and Social Consequences:

• Erosion of Trust: Bribery undermines trust in both public institutions and private organizations.
• Inefficiency and Inequality: It leads to inefficient allocation of resources and perpetuates inequality.
• Harm to Society: Bribery can result in substandard services and infrastructure, harming society at large.

Real-world application

Organizations and governments worldwide are increasingly focusing on combating bribery through stringent laws and regulations. Companies are required to implement robust compliance programs, conduct regular risk assessments, and provide training to employees to prevent bribery. Whistleblowing mechanisms and internal audits are also essential tools in detecting and addressing bribery.

For instance, a multinational corporation operating in several countries must ensure compliance with anti-bribery laws such as the FCPA and the UK Bribery Act. This involves creating clear policies, conducting due diligence on third parties, and ensuring that all employees understand and adhere to ethical standards.

Related topics

• Corruption
• Foreign Corrupt Practices Act (FCPA)
• UK Bribery Act
• Anti-bribery and corruption (ABC) policies
• Whistleblowing in business
• Corporate governance

Understanding bribery and its implications is crucial for fostering a fair and transparent environment in both public and private sectors. Efforts to combat bribery contribute to the integrity and efficiency of institutions and promote trust within society.