Driving culture change at the 2nd Integrity Summit

(Last September 18, the 2nd Integrity Summit gathered almost 500 stakeholders and partners of the Integrity Initiative campaign at the Hotel InterContinental in Makati. Let me share with you an abridged version of the opening remarks I delivered at the summit.)

A year ago, we gathered together for the 1st Integrity Summit and came away eager to take collective action against the culture of corruption that has long beset our country and to revolutionize the way we do business in the private and public sectors. Today, the 2nd Integrity Summit is an opportunity to take stock of what we have accomplished so far, to share experiences and learn from each other, to draw strength from each other, to assess the challenges that lie ahead, and to outline our next steps.

The signatories to our Integrity Pledge have more than doubled from 700 last year to about 1,500 today. Thirty-two heads of government agencies have signed the pledge. And this morning, we will witness 30 industry leaders pledge their institutional commitment to the campaign as their organizations formalize their entry into the Integrity Consortium or ICON.

Our campaign has started to spread outside Metro Manila. A private-sector-led Mindanao Integrity Council has been formed and a similar group is being organized in the Visayas.

A new norm

Skeptics say that signing the pledge is useless. I beg to disagree. Moral compacts work, especially if there is a big enough collective committed to upholding it. There is also the fear that honest behavior is a competitive disadvantage.

In the alternative order we are trying to propagate, ethical companies will not only reap respect but also attract the best workers, gain the loyalty of clients, be rewarded with incentives, and be given the chance to compete on a level playing field. Unethical companies, on the other hand, will have to contend with their higher exposure to business risks, and pay the price for their misconduct through exclusion from business opportunities and other penalties. This is not just a pipe dream; we see it happening in other countries. Now, we want to see it happen in the Philippines, not just as an alternative way of doing things, but as the established norm.

At the outset, there may be a cost to ethical leadership, but it is a cost worth bearing. We will all get to the level playing field if we lead the way and stay the course until we reach that critical mass. As our numbers increase, I assure you we will have the leverage to demand that business partners and public servants abide by the same integrity standards.

It is up to every company and agency to set the right tone. These efforts, taken collectively, will provide us with the momentum to break bad habits and abandon old notions about the moral compromises we need to make to get ahead.

Next steps

Where does the Integrity Initiative campaign go from here? After the launch last year of the Unified Code of Conduct for Business, we have been developing a framework and the mechanisms that will help signatories abide by these principles.

The first step we have identified is Integrity Assessment. It entails the creation of integrity circles in our organizations, within which a process of reflection on the kind of culture that permeates our own companies will be undertaken. Each company will be asked to use the Integrity Assessment Tool, an online program that scores a company’s level of organizational integrity based on its evaluation of a company’s answers to a comprehensive set of questions. The goal should be to improve on your integrity assessment score each year.

The next step is Integrity Validation, which we are aiming to commence next year. This will involve a third-party entity that, based on a company’s integrity assessment, will see to it that appropriate control measures have been introduced to improve the company’s organizational integrity.

Partnership with government

As we take our campaign to the next level, we realize that we will need to work more closely with government to sustain our campaign, particularly in the form of incentives for companies that will be certified to have abided by ethical business practices. Thus, allow me to take this opportunity to air some of the Integrity Initiative’s proposals for the government’s consideration.

For the Bureau of Internal Revenue, we would like to propose the adoption of a “Least Audit Priority” classification for signatories who will pass the Integrity Validation process and meet specific tax payment thresholds. We would also like to propose the introduction of a mechanism that will protect good taxpayers from harassment, on the one hand, and help the BIR run after tax evaders, on the other.

For the Bureau of Customs, we propose the rationalization of the existing “Green Lanes,” and in lieu of these, “Integrity Lanes” can be set up. Integrity indicators can be included in the bureau’s Risk Management Strategy, particularly in its compliance measurement and monitoring system.

These are just some of the ideas that we will bring forward to the Department of Finance. We hope that we can get a dialogue moving by early next year.

Integrity champions

Through our collective action, we can defy limits, overcome greed and corruption, and bring forth a new breed of integrity champions committed to establishing a new ethical norm in our country. Your presence today tells me that we can make that transformation happen soon.

Ramon R. del Rosario Jr. chairs the Integrity Initiative and the Makati Business Club. E-mail comments to rrdelrosario@hotmail.com.