Does stakeholder engagement affect corruption risk management?

Abstract

Major international organizations such as the Organization for Economic Cooperation and Development (OECD), the United Nations (UN), and the European Union (EU) have stressed the importance of risk management as a useful mechanism to prevent corruption. Anticorruption laws or regulations have been developed around the world, both at regional and national level. These aim to support the design and implementation of proactive management of corruption risks in the public sector. This article aimed to investigate the relationship between stakeholder engagement and the extent of implementation of corruption risk management systems by public organizations. We analysed the anticorruption plans of 343 Italian administrations to explore how different categories of stakeholders (i.e. employees, governing bodies, users/citizens associations) can contribute to the corruption risk management process. We found that the involvement of external and internal stakeholders can positively affect the extent of implementation of corruption risk management systems by public organizations. We explained our results by referring to both traditional organizational theories (institutional theory and the resource-based view) and public governance theories (collaborative and inclusive governance). Institutional pressures, knowledge and values emerged as keys to understanding the results.

Will the integrated GRC implementation be effective against corruption?

“…The compliance as the third function studied influences anti-corruption, was identified compliance monitoring instruments (Hansen, 2012; Hashim et al , 2020), program/system (Hansen, 2012; Hashim et al , 2020; Previtali and Paola, 2017) and regulatory/laws (Cheng et al , 2021; Hashim et al , 2020; Mohammadi et al , 2020; Monteduro et al , 2021; Previtali and Paola, 2017; Reisach, 2016). However, compliance with this regulation is not found too often because it is usually considered corporate governance.…”

“…The data shown in Table 3 illustrates the strength of each function, governance, risk management and compliance in the company to eradicate corruption by emphasizing one or more instruments for improvement. For example, the governance function identified 13 instruments such as accountability as an instrument that must achieved in eradicating corruption as stated by the author (Buduru and Pal, 2010;Hansen, 2011Hansen, , 2012Prabowo, 2020), in addition to corporate reputation instruments (Mohammadi et al, 2020;Reisach, 2016), culture and ethical policy (Calder on et al, 2009;Cheng et al, 2021;Hashim et al, 2020;Reisach, 2016), inflation control (Mohammadi et al, 2020), integrity (Calder on et al, 2009;Prabowo, 2020;Reisach, 2016), internal control (Yang and Lee, 2020), monitoring (Buduru and Pal, 2010;Previtali and Paola, 2017), organizational structures (Dion, 2013;Monteduro et al, 2021;Soederberg, 2016), performance indices (Hansen, 2012), quality assurance (Yang and Lee, 2020), responsibility (Cheng et al, 2021;Hansen, 2011Hansen, , 2012Previtali and Paola, 2017;Reisach, 2016), transparent (Hansen, 2011(Hansen, , 2012Buduru and Pal, 2010) and the last instrument is values and norms behaviour (Dion, 2013). Governance is the company's critical point in the face of business competition and sustainability.…”

“…Furthermore, the second function is risk management. This second most researched article on its relevance to anti-corruption, covering five instruments such as corporate risk by the author (Yang and Lee, 2020; Cheng et al , 2021; Monteduro et al , 2021; Reisach, 2016), in addition to operational risk instruments (Calderón et al , 2009; Mohammadi et al , 2020; Prabowo, 2020), reputation risk (Hansen, 2012; Mohammadi et al , 2020), risk assessment (Buduru and Pal, 2010; Hashim et al , 2020; Previtali and Paola, 2017; Soederberg, 2016) and the last instrument of thinking and action by the author (Hansen, 2011). These instruments are also of concern to researchers because the risks faced by the organization are significant to be managed and anticipated immediately.…”

Corruption and Fraudulent Activities in Higher Education: A Study of Literature

“…The role of the auditor in detecting fraud using the pentagon fraud theory shows that arrogance and competence are driving factors for corruption, coupled with low ethical values(Bota-Avram et al, 2022; Sahla & Ardianto, 2022). The involvement and role of internal and external stakeholders in preventing corruption(Monteduro et al, 2021) is needed, as well as a whistle blower which functions as an internal control mechanism to help prevent corruption in higher education(Mohamed et al, 2019).Challenges faced in preventing corruption, as found in Malaysia, obstacles in preventing corruption(Jones, 2022), also occur in the construction sector(Amoah & Steyn, 2022).…”

Stakeholder engagement and the role of institutional dimensions

“…Following Aguilera & Jackson (2003), ownership concentration is a crucial feature of the institutional setting because it determines how owners, workforce, and managementconsequently, stakeholders -interact and engage. In this respect, stakeholder engagement enables governance structures to become more dynamic and receptive to stakeholders' expectations (Monteduro et al, 2021). In addition, the communication process between organizations and their stakeholders gives rise to collaborative learning interactions that would allow the converging of activities and confidence among the stakeholders involved (Monteduro et al, 2021).…”