Survey: 64% of Compliance Officers Don’t Rely on the CPI

The Corruption Perception Index (CPI) has been widely used as a tool for measuring corruption worldwide for over two decades. However, a recent survey of Compliance Officers has revealed that 64% of respondents feel that they would not rely solely on the CPI to assess corruption risks in their compliance programs. The results of this survey highlight a growing concern among anticorruption professionals about the limitations of the CPI as a measure of corruption.

Limitations of the CPI

One of the primary criticisms of the CPI is that it is based solely on perception, rather than actual data. The index is compiled from the opinions of businesspeople, experts, and country analysts, rather than on concrete evidence of corruption. This means that it can be influenced by biases and subjective interpretations, leading to an incomplete picture of the corruption situation in a country. In addition, the CPI only provides a snapshot of corruption in a single year and does not take into account trends over time.

Another limitation of the CPI is that it only measures corruption at the macro level, rather than providing insight into specific areas of corruption within a country. This can make it difficult for Compliance Officers to identify areas of risk within their organizations and to develop effective compliance programs to mitigate those risks. For example, a country may score well on the CPI, but still have significant corruption risks in specific industries or government agencies.

The results of the recent survey of Compliance Officers suggest that there is a growing recognition of these limitations among professionals in the field of anticorruption. The survey shows that 22% of respondents would not rely on the CPI to measure corruption risks, while 64% feel that they would still use it, but in combination with other tools.

These results demonstrate the need for alternative tools to measure corruption risks in a corporate compliance program.

Alternatives

There are several alternative publicly accessible tools that measure corruption risks (noting they all have their strengths and limitations). Some alternative indices to the CPI include:

1. Ibrahim Index of African Governance (IIAG)
2. World Bank’s Control of Corruption Indicator
3. World Economic Forum’s Global Competitiveness Index (GCI)
4. Freedom House’s Freedom in the World Index
5. World Press Freedom Index
6. World Health Organization’s World Health Statistics
7. World Economic Forum’s Global Enabling Trade Report
8. World Bank’s Worldwide Governance Indicators (WGI)
9. Heritage Foundation’s Index of Economic Freedom
10. Environmental Performance Index (EPI)
11. United Nations Development Programme’s Human Development Index (HDI)
12. Mo Ibrahim Foundation’s African Governance Report (AGR)

A more in-depth comparison of these indices is available in U4’s “How to Guide for Corruption Assessment Tools, 2nd Edition“. The purpose of this guide is to provide an overview of the strengths and limitations of the various tools and indexes currently available to the public.

In addition to using aggregate indices, compliance officers can:

1. Utilize sector-specific tools: sector-specific tools can take into account the specific corruption risks present in a particular industry or sector. This allows compliance officers to gain a more nuanced understanding of corruption risks in their specific business area.
2. Conduct qualitative assessments: In addition to aggregate indices and sector-specific tools, compliance officers can also conduct qualitative assessments to gain a deeper understanding of corruption risks in their organization. This can include reviewing internal policies and procedures, conducting internal audits, and engaging in stakeholder consultation.
3. Collaborate with experts: compliance officers can collaborate with experts in anti-corruption and governance to gain a better understanding of corruption risks and how to mitigate them. This can include working with anti-corruption NGOs, academic institutions, and government agencies.
4. Monitor and review regularly: Finally, regularly monitor and review corruption risks to ensure that they are effectively managed and mitigated. Compliance officers can use the information gathered through the use of aggregate indices, sector-specific tools, and qualitative assessments to regularly assess the effectiveness of their organization’s anti-corruption measures.

 

In conclusion, while the CPI has been a valuable tool to shed light on the fight against corruption, and has certainly been a colorful map to trigger discussions in awareness sessions, its limitations as a measure of corruption make it important for Compliance Officers to use alternative tools to assess corruption risks in their compliance programs.

The results of the recent survey of Compliance Officers highlight the need for a more comprehensive approach to measuring corruption, one that takes into account both perceptions and actual data. By using a combination of tools and methods, Compliance Officers can gain a more complete picture of corruption risks and develop more effective strategies for mitigating the risks that their organization is exposed to.