Recognised as the single greatest obstacle to reducing global poverty, corruption is now the third largest industry in the world. In development terms, each year between 20% and 40% of ODA is “stolen” by public officials. It does not stop here, however, as its magnitude and pervasiveness – when combined with the corruption risks inherent in the sector – has now reached the point where corruption is perverting CSOs’ missions. At stake here is the accountability and credibility of the CSO sector as a whole. But is leadership up to the challenge?

Acknowledging the elephant in the room

A simple litmus test is asking the following question: ‘Is corruption a problem within your organisation?’. In a 2014 survey of Australian and New Zealand CSOs, 90% felt that while corruption was a problem for the sector, 72% (or three out of four) stated that it was not an issue for their organisations. In other words, while it was a problem, it wasn’t theirs! So if most CSOs don’t see it as an issue, why should their staff?

Leadership: The key variable

So what caused this sudden spike? A closer examination shows that the corruption up-surge directly correlates with the appointment of a new country director.

The change brought a rethinking of the way corruption was viewed. Instead of treating it as an overhead (as is traditionally the case) anti-corruption related costs were treated as programme related. In other words they were seen as being an essential element in securing a positive development outcome. Based on this, a number of simple but extremely effective (low cost) anti-corruption and accountability related initiatives were implemented in the six to twelve months preceding the corruption surge.

When surveyed (in ‘Year-7’), staff overwhelmingly stated that corruption had dramatically declined, with the primary reason being that “management is now serious”!

The Key Take-away: Turning the threat into an opportunity

One of the cases of corruption uncovered was a long running fraud scheme involving multiple staff members. Taking two years to finalise, it was used to showcase to stakeholders, the organisation’s approach to corruption. Dealing with it in an open, proactive and transparent manner, and taking strong decisive action, turned the threat into an opportunity (again a mind-set change by the leadership) via:

1. Creating a strong deterrent via sending a clear message on the consequences of acting corruptly;
2. Increasing accountability with beneficiaries by showing the organisation was holding itself and its staff accountable; and
3. Signalling to donors that it was an ethical and trustworthy organisation, leading to substantial increases in budgetary support the following year.

The challenge in all of this is whether other CSOs are prepared to emulate the example set above?

I invite Charter Members, activists, anti-corruption advocates and others to share their perspectives on how CSO leadership can truly embrace anti-corruption practices, and imbed it into their organisations. Are there other examples of successful, cost-efficient and effective anti-corruption practices that CSOs can embrace? If so, what are they?

@JeremySandbrook @Integritas360