The Power of People

  • March 13, 2019
  • Patricia Osoko

The Power of People

Public outrage over corruption is shattering traditional political systems, and antiestablishment leaders are being elected across the globe. While we may be somewhat sheltered in Canada, anticorruption has become a powerful driving force for change in places such as Latin America and South Asia, where economic instability, inequality and violence have had devastating consequences. Individuals are looking for leaders who demonstrate honesty and integrity that match their own. Beginning in the political arena, it is also spilling into the corporate sphere. As in-house counsel, we are the moral compass of our organizations. We need to be prepared.

I recently accepted a posting to Mexico, where I am seeing first-hand the implementation of radical anticorruption policies by President Andrés Manuel López Obrador, known throughout the country as AMLO. This leftist leader of the Morena party is wildly popular in this country. AMLO’s resume includes political activism and championship of the poor, as well as time as the mayor of Mexico City, where he is seen as a pragmatic populist. On the campaign trail, he vowed to combat the power of the privileged political and business elite, jolting markets and unsettling investment.

Since coming to power in December 2018, he has put his antiestablishment and anticorruption ambitions into practice. One of the first moves of his government was to shut several major gas pipelines from which fuel was being syphoned and sold in the black market. It was alleged that the theft was aided by the active participation of high-ranking officials in the state-owned energy company Pemex, which supplies most of the fuel to the country’s gas stations.

This bid to reduce fuel theft resulted in weeks of severe fuel shortages, which had a major impact on daily life. I live within walking distance of my office, but many others are not so lucky. In January, for instance, some of my co-workers were having to get up in the middle of the night to fill their tanks or endure line-ups of 3-4 hours at the pumps. Supply chains were also temporarily disrupted, as it became difficult to move goods around the country.

Yet, despite the inconvenience and short-term economic disruption, the fuel shortages have not cost the president any support. Not one person I spoke to complained about the government’s action or thought it had gone too far. Most were more concerned with the economic damage that has been caused by decades of fuel theft, which has cost Pemex billions over the years.

Fixing the System

Curbing fuel theft in Mexico is widely seen as a necessary step on the path towards equality. When everyone respects legal rights of ownership and distribution, society can operate fairly, openly and progressively. People are justifiably outraged when legal process is corrupted to the advantage of a few while the majority of the population lives without basic services.

When faced with such corruption, it is encouraging to see people stick up for what is right, despite short-term pain and frustration. Their personal sense of honesty and integrity is being leveraged as a powerful weapon to fight an entrenched regime that is rotten.

A comparison can be made between the Mexican government’s actions to curb fuel theft and the Indian government’s strategies to end systemic corruption. Five years ago, Narendra Modi became the Prime Minister of India following a campaign where he pledged to clean up the system, and one of the actions the government took was demonetization. Effectively, they removed high currency banknotes from circulation in late 2016.

This move was widely seen as a crackdown on so-called “black money”—cash used to fund illegal activities ranging from tax evasion to terrorist financing. The idea was that demonetization would eliminate corrupt behaviour by cutting the time-worn channels through which government officials laundered money.

Almost overnight, the government recalled all 500 and 1000 rupee notes. The result was weeks of economic disruption and long queues at banks. But a corollary benefit was that more citizens began to participate in the banking system. Digital banking took off, enabled by the large number of people owning mobile phones. Because these transactions leave a paper trail, they are less susceptible to corruption. India essentially began the move from a cash-based to a cashless society, with the large boost in digital payments stimulating a digitally enabled economy.

In addition to demonetization, the Indian government introduced a range of other policies aimed at curbing corruption. As a business traveler in India last year, I could sense the popular support for these initiatives. While the jury is still out on their effectiveness—India dropped in the Trace International’s annual corruption perception index this year—these policies seem to give the average person hope things will improve.

Brightening the Outlook

This attitude makes me optimistic that honesty and integrity are becoming entrenched in the mainstream psyche in emerging economies. People are no longer willing to turn a blind eye to financial and legal impropriety by government officials. But what about corporate actions? Once citizens are confident their governments are operating with integrity, the spotlight will inevitably move to companies.

As Canadian organizations go global, we need to pay close attention. We must model best practices in compliance and corporate social responsibility, especially in emerging markets, where these values are so prominent in public life.

In particular, companies should be attuned to popular trends and realize that with economic power comes the responsibility to act with honesty and integrity. Failure to recognize the importance of having integrity is battering the reputations of many large companies whose operations span the globe, from Facebook in the tech sector to Nissan in the automotive industry. As with politics, public opinion is swinging strongly to favour corporate integrity—a trend we should capitalize on as in-house counsel.

Recognizing the Power of Employees

Companies do not operate on their own; they carry out their business through the actions of employees. Like the average citizens in Mexico and India, most employees are honest and want to do the right thing. Isn’t it time we leverage this inherent integrity?

Corporate policy manuals, for instance, tend to adopt a prohibitive or restrictive tone. How do we instead devise policies that maintain a baseline of consistency but empower employees to demonstrate their integrity?

Recently, I led an initiative to revise our company’s Code of Conduct, where we started from the assumption that all of our employees will make the right decisions if given a chance. We also assumed they would like guidance on situations that are tricky or are not black and white. We came up with a suite of policy statements that were linked to our corporate values, along with examples of challenging situations.

I like to say the code can be broken down into simple principles: “Don’t lie, don’t cheat, don’t steal and make the best decisions you can. When you have a problem, talk about it with a supervisor, manager or compliance officer. No surprises.” Brief, to the point and relevant, this new code is very different from the previous one—and much more useful.

We should be looking to make all corporate policies and messaging equally accessible. We want to provide useful tools and guidance to our employees, who come equipped with the desire to be honest and act with integrity. We want to share how we, as a company, do business in a thoughtful and fair way.

By shifting the conversation, I think we, like the average citizens of Mexico and India, can aspire to a future where corruption is an aberration, not the status quo, and where everyone has a role in ensuring the right thing is done.

How Can In-House Counsel Foster Integrity?

  1. Be accessible. Be available as a sounding board for employees who may face integrity issues. Visit site offices and operations where those issues may be especially challenging.
  2. Show you are interested. Attend seminars or courses, and read the latest cases and media reports on corruption. Make sure your internal and external resumes reflect this interest. Be involved in internal discussions and committees on best practices.
  3. Lead the charge. Review your company’s code of conduct, policies and practices to see if they reflect the latest integrity trends. Be prepared to make suggestions for improvement as the marketplace evolves.
  4. Be a model of integrity, in both personal and work activities. Have the courage to always do what is right even when it is hard.

Note: The views expressed in this article are those of the author and not those of her employer.

Patricia Osoko is the Legal Director for ATCO México, where she supports operations in energy infrastructure and modular construction, as well as new growth opportunities. When she is not busy learning Spanish and dodging Mexico City traffic, Patricia leads Silver Birch Innovations, where she studies and implements innovation and cultural transformation through digital reinvention, policy and process restructuring. Connect with her on LinkedIn.