Transparency and accountability
in ethics and governance
Truth and Trust
Truth & trust is crucial and concerns all relationships. When we trust someone, we have less stress in our lives. Trust is essential to our success in both business and personal relationships. A relationship without trust is not really a relationship at all. Truth & trust is right at the foundation of the success of any partnership and business. A business built on trust has a competitive advantage, because trust is actually rare. When trust is low, efficiency goes down and cost goes up. When trust is high, efficiency increases and cost declines.
One key is clear and consistent communication. We shall face our challenges head on. If there is a problem, we shall say so. If we are too busy trying to handle issues for example, we send short status messages so our clients know that we are still working on solutions. The worst thing we can do is to stop communicating, if we stop communicating, people may assume the worst. Learning to communicate clearly and building trust will improve our lives and our businesses.
As consultants we may aim for under-promising and over-delivering to build more trust into your relationships.
Even though lying is less painful in the short run, it will ruin us in the long term because we will lose trust. And trust is VERY hard to recover. We see businesses and relationships fail because of issues where if they had told the truth it might have been painful – but not lethal to business relationships.
Trust in others
What can we do to improve the trust in our relationships and businesses? Eliminate those you can’t trust and you will shorten the amount of time it takes to get successful.
Most often, our clients will not understand how complex what we are doing is and that it takes time to deliver quality, why our customers may have unrealistic expectations. Dishonest clients will pretend to not understand, hoping you will give them more work than you billed. Just as we need to be trustworthy, we shall fire bad clients immediately to make room for good ones.
Background & context
Scientific research claims that corruption cannot not be dealt with by just enforcing financial administration and accounting procedures, thus HR&S targets both agency and a Strategy for change. Moreover, our accountability management targets both ethics and governance and both financial management, sustainable economy as well as programme outcome and impact.
1. Develop and implemented a strategy for change that ensures:
i) social impact,
ii) sustainable economy, and
iii) transparency and accountability.
2. Agree on and implement activities and milestones.
3. Agree on and implement measurable indicators.
4. Agree on and implement how to collect, compile and analyse monitoring data, when and by whom.
5. Agree on and implement how to generate and share reports, when and by whom.
A solid risk management structure is agreed on per programme.
1. An investment is preferably guaranteed by a value holding object agreed on by both parties. The small business loan-takers may lack guarantee opportunities and can instead be be organised as cooperatives, where the members are jointly responsible for the pay back of the group. This can be challenging for the group members and the cooperatives have to be carefully formed and members have trustful relations.
2. The social context is informed about the programme, and shall help coach and guide on the social good, sustainable economy and accountability. The loan can be secured by a signature by one or more social leaders or other stakeholders agreed on by both parties.
3. Action10 and HR&S transfers funds to to RISE Centre Programme management Partners in the Target countries (RISE PP). All partners develop milestones together and funds are distributed by RISE PP to TPs as milestones have been reached. TPs have their own accountants, and external auditings and they are responsible for their own bookkeeping and financial reporting.
Internal support & control
- Recruitment of an accountant.
- Recruitment of a programme manager.
These persons shall be paid through the income from the programme.
- An independent Board of Trustees shall be selected, Bord meetings held minimum twice a year and minutes from the boardmeeting shall be shared with the coach and the partners. Board members are not paid.
External Support & Control
The RISE Centre is responsible for the local running of the “Accountability management programme”.
The support & control staff ensuring auditing, survey managing and coaching shall be assigned by, or at least be approved by the RISE Centre management. The support and control staff can be employed by the RISE Centre.
Fifteen % of transferred investment capital is invested in accountability measures. Five % (minimum EUR 300) each in local auditing, survey managing and coaching, in this priority order. When the investment capital or profit is large enough, then the local income shall sustain the auditor, survey manager and coach fees.
Auditing The local external auditor does quarterly auditing, including one at the end of the fiscal year. Most likely, when doing the quarterly auditing, the auditor will give guidance on how she/he would like the bookkeeping to look at the end of the year. The auditor produces and end of the year auditing report and ensures a management response. The annual auditing report and management response is shared with the partners. The auditor selected has professional education and experience and may or may not be employed at an auditing firm. Contract are signed for one year at a time until trustworthiness have been proven.
Survey management The HR&S Strategy for change is based on measurable indicators, and data is continuously collected and compiled by a local “Survey manager”. The survey manager visits quarterly. In terms of programme and financial monitoring the survey manager uses evidence based methods, follows the TestE strategy and sends reports to HR&S after each visit as well as s summarising annual report. Data is also exchanged through ROPEdata.se
Coaching The local coach visits monthly. In terms of programme, the coach follow the ROPE strategy, addresses the measurabl indicators in the Strategy for change and feeds information to the Programme Journal. In terms of financial coaching, the coach ensures quarterly control of the bookkeeping, as well as internal and external financial control systems. Data is exchanged through ROPEdata.se. The local coach sends annual reports to the HR&S office in Sweden.
Motivation & Team empowerment
Background & context
It is through our team, that we can respond to the challenges of a changing economy and the effective management of performance in our programmes. Hence, the increased emphasis on improving performance through motivation. It is obvious that motivated team members performs better, and that leaders must understand their role and offer support. It can also be assumed that a safe and conducive work environment, fair performance appraisal systems and opportunities for promotion are necessary to maintain a high level of team motivation. Furthermore, team members should be exposed to career development opportunities and motivational talks.
Motivated team members perform at a higher level, making it easy for leaders to motivate them further, thus achieving both individual and programme objectives.
Accountability must be built
Mungiu-Pippidi (2017 a) claims that corruption is a default governance order, as people tend to favour their own, be it family, clan, race or ethnic group, and that treating the rest of the world fairly, seems to be a matter of extensive social evolution and sufficient resources. Mungiu-Pippidi (2017 b) argues further that most countries today are corrupt rather than non-corrupt and that we should understand corruption as a social practice or institution, not just as a sum of individual corrupt acts. The author continues that in a development perspective, countries whose governance is presently based on norms like ethical universalism (public goods distributed fairly and equitably) have a past with other norms and that the history of clean countries shows that good governance is the product of evolution. Modernity is a long and frequently incomplete endeavour to build private separation and a state that is autonomous towards private groups.
Mungiu-Pippidi (2017 b) claims further that treating corruption as a deviation is problematic in lower-income countries, and points out that most anti-corruption approaches are built on the concept that public integrity and ethical universalism are the default governance norms. The author claims that this approach leads to policy failure, as norm building and norm enforcement require two very different approaches. The approach leads to investing in norm-enforcing instruments in cases where instead norm-building instruments are required. The author recommends to rather draw and support national long-term strategies aimed at building public integrity and ethical universalism, as well as to reduce opportunities and increase constraints for corruption.
An individual is corrupt when engaging in corrupt acts, regardless of whether the person is on the public or private side. In one context, the corrupt agent is just a deviant and can be sanctioned by the principal if disclosed (Mungiu-Pippidi, 2017 b). In another case, the principal colludes with the agent, and corruption is exercised throughout a pyramidal organization that extracts resources disproportionately in favour of the most powerful group. So, anti-corruption means solving problems of power discretion and collective action.
Countries can achieve control of corruption in two ways (Mungiu-Pippidi, 2017b). One is the surreptitious way, where open access, free competition and meritocracy are achieved as a side effect through incremental changes of institutions, without being a main collective goal. This worked in the past for many of today’s higher-income countries. The second way is, when rule of law and control of corruption are delivered as collective goods after collective agency and investment, for instance after sustained anti-corruption campaigns. Both paths need human agency. In the former, the role of agency is small. It is presumed that nobody will oppose reforms that are not perceived to be posing a threat to anybody. Those reforms are just common sense, professionalism and a public demand for government performance. In the latter case, considerable efforts and alignment of both the interests favouring change and an ideology of ethical universalism are needed. Identifying the human agency capable of delivering change becomes essential.
Demand for good governance is increasing all over the world (Mungiu-Pippidi, 2017b). Changing governance across borders is a difficult task, but international partners may want to try to socialize with enlightened elites, and there are certainly opportunities to help civil society and a developing enlightened citizens’ community (Mungiu-Pippidi, 2017 b). In practice, though, that is not so easily done. Corrupt government are often treated like as enlightened elites and entrusted the ownership of anti-corruption programmes that will never take off – not only because they often are the wrong programmes, but because they really should be implemented against the main interests.
Fortunately, modern smartphones with Internet access provide a great shortcut to individual autonomy and enlightened participation. Any assistance towards increasing the percentage of ‘enlightened citizens’ armed with smartphones is worthwhile (Mungiu-Pippidi, 2017b). But for a transition strategy we need more than that. We need a careful stakeholder analysis and coalition building. As a ground rule, whoever is competitive stands to lose in a particularistic society (exclusive or special devotion to a particular interest). He or she faces two options: to desert particularism and move on to a more meritocratic realm (hence the close correlation between corruption and brain drain), or to stay and fight. These are our recruitment grounds. It is essential to understand just who has the interest to challenge the rules of the game and who is prone to defend them, in other words, to identify the institutional status quo losers and winners (Mungiu-Pippidi, 2017b). Who would remain winners even if they open the door to more merit-based competition? Who, among today’s losers, would gain something essential? These groups need to come together to make change happen.
Strategy for change
Mungiu-Pippidi (2017b) argues that we need a theory of change addressing why the status quo would change and who would bring the desired evolution. (HR&S is using the terminology “Strategy for change” instead of the commonly use “Theory of change”, as in scientific research the expression “theory” has a well defined meaning.) We may also want to figure out whom, when and how international partners can assist along the road to a virtuous circle. The main theories of change presently informing intervention are far more general: modernization theory (although education and economic development have increased over the past twenty years without bringing better governance) – and state modernization, the belief that by building state capacity, the integrity problems will be resolved (Mungiu-Pippidi, 2017 b). But as we have a very close correlation between rule of law and control of corruption, the results are often clear: when corruption is high, rule of law is below the threshold. So, legal approaches to anti-corruption (an anti-corruption agency or a strong punitive campaign) can hardly be expected to deliver if the rule of law is weak. The same goes for civil service capacity building in countries where bureaucracy has never achieved autonomy from its rulers. What is needed for good governance is an autonomous class of magistrates and an autonomous class of bureaucrats (Mungiu-Pippidi, 2017 b). These cannot be delivered by capacity building in the absence of domestic political agency. This is why the functional accountability tools are those associated with civil society agency. Voluntary implementation of accountability tools by groups involved (businesses who lose public tenders, for instance, or journalists seeking audience) generally works better than official implementation. The latter seldom delivers.
 Mungiu-Pippidi, A (2017a) Background Paper for the 2017 World Development Report. Corruption as social order. The World Bank, documents.worldbank.org http://documents.worldbank.org/curated/en/387821497285734533/pdf/116067-WDR-PUBLIC-WDR17-BP-Corruption-as-social-order-MungiuPippidi.pdf Downloaded March 2020.
 Mungiu-Pippidi, A. (2017b) Seven Steps to Evidence-Based Anticorruption: A Roadmap. Rapport 2017:10 till Expertgruppen för biståndsanalys (EBA). www.eba.se. ISBN: 978-91-88143-34-1. Printed by Elanders Sverige AB Stockholm 2017.