DSC 1588 webDr. Klaus Moosmayer is Chief Compliance Officer of Siemens and a long-standing member of IACA’s frequent visiting faculty. He is also the Chair of the B20 Cross-Thematic Group on Responsible Business Conduct and Anti-Corruption, which recently released a paper (available here) urging G20 leaders to do more to promote integrity by creating opportunities for responsible companies.

On 3 May Dr. Moosmayer will be in Berlin for the B20 summit, during which the paper’s recommendations will be presented to the German Chancellor Angela Merkel. Earlier this week he was at IACA for part of the Academy’s tailor-made seminar for senior Siemens compliance professionals, and he spoke with us about a range of corporate integrity issues.

In your introduction to the paper, you mention that the business community has seen a lot of great commitments by G20 leaders in recent years and now wants these to be implemented. What reasons do you have to be optimistic on this occasion?

Klaus Moosmayer: Momentum is often created by a specific incident. For example, the first topic we dealt with was transparency and beneficial ownership, which has been on the G20 agenda for a long time. Now it has gained momentum because the Panama Papers issue had such a great impact on politicians. They said, “Oh wow, we’ve had these G20 recommendations and agreements for years, and now we have to implement them.” And now this is happening.

The other point is that it’s important simply to keep the topics on the agenda, and that’s why we fight every year to keep anti-corruption there. Because if it’s removed from the agenda then nobody talks about it.

Given all the recent corporate scandals around the world, there will no doubt be some public cynicism towards the concept of “responsible business conduct”. What specific steps can companies take to counter such perceptions?

KM: Excellent question. First of all, businesses can learn from a scandal and subsequently set an example - take our own Siemens scandal, which happened exactly ten years ago. You need good examples that things can change.

Second, there are always these questions of perception. Do we have more misconduct, more corruption? Or do we just see more due to social media and the global village that the world has become? I think this relates closely to topics such as transparency and beneficial ownership – when you see more cases, that’s a good thing.

How do companies convince their shareholders that responsible conduct is worthwhile when competitors might be gaining an advantage from corrupt and non-compliant behaviour?

KM: First there is the personal side. You can ask a shareholder the question: Do you want to be transparent as a person? When you come home from work do you want to be able to tell your husband, wife, children, or parents what you have done today? Do you want a company in which you hold shares to have people who can act in a corrupt and non-compliant way?

The other thing is that compliance can be a competitive advantage. We see more and more laws, which we are of course advocating for, and ways of incentivizing compliance efforts - in public procurement for example. And we see more companies from jurisdictions that don’t have a good reputation for enforcing anti-corruption laws being interested in compliance topics. This is becoming more global and can become a real threat for companies that don’t see this trend.

Do we attach too much importance to the “tone at the top” for creating and reinforcing ethical cultures within large organizations? Isn’t the “mood in the middle” more important?

KM: Absolutely. Look, don’t get me wrong: if the tone from the top is not there then you’re lost anyway. But the guys on the front line – the purchasing manager, the sales head, and so on – have a huge impact. These middle managers are where young employees are directed to on their first working day. And these employees have questions: “I have a problem - what I should do? Should I speak up or find a solution by myself?” The mood in the middle is crucial for success and sustainable compliance. It’s an ongoing educational effort and fight.

What would you say are the key elements of effective education and training to promote corporate integrity?

KM: Not what they were ten years ago, when you did a training with 25 PowerPoint slides and nothing else. The young generation, including in my own family, learn in a different way - via social media and using games, for example. At Siemens we’re now using compliance games as one way to educate our people. There are so many possibilities to read things, but how will we ensure that people read them?

So I think there has been a huge shift. At the same time, face-to-face contact and learning still matters. Take IACA’s Summer Academy - if you ask the participants afterwards, they say they’ll never forget the in-person meetings and exchanges they had during the programme.

What do you think will be the two or three biggest anti-corruption and compliance challenges for businesses worldwide over the next couple of years?

KM: Corruption schemes are becoming much more sophisticated. They might be disguised as a very nice corporate social responsibility project, a sponsoring deal, or an offset agreement. This all looks like it’s legitimate and good business too. So we have to ask who is really benefiting from this. That’s why the beneficial ownership topic is so important. You always have to try to be a step ahead.

The other topic we still need to address, one in which IACA could play a crucial role, is better collaboration between the public and private sectors. There is progress at the OECD and at the G20 and B20, but it is still like “you are here and we are here and we live in different worlds”. And I understand this. Independence is of course important, but we are ultimately facing the same issue. That is a really difficult topic we have to work on.