An agency theory approach towards bribery

Abstract

Purpose

This paper aims to discuss the role of agency theory in combatting bribery in multinational corporations. It is shown how a combination of bonus and malus payments could help to create the right incentives for agency.

Design/methodology/approach

Based on the analysis of 15 formal and 15 informal expert interviews with both prevention experts and corrupt individuals, concrete ways of more effectively combatting bribery have been developed.

Findings

As a result, it is suggested that matrix systems could help to adjust incentives systems to take compliance issues into account. It is found that multinational corporations should eliminate.

Research limitations/implications

This study’s findings are limited to the perspectives of 30 interviewees. Hence, it is possible that a study with a larger sample conducted in different countries or at a different time would have led to different results.

Practical implications

The identification of the potential role of incentive systems in compliance mechanisms is meant to provide compliance officers and legislators with valuable insights into why the current prevention schemes are ineffective. This can help to both improve compliance mechanisms.

Originality/value

While the empirical findings are based in Europe, the results could be applied globally.

Citation

Johannes Teichmann, F.M. (2019), "An agency theory approach towards bribery", Journal of Financial Regulation and Compliance, Vol. 27 No. 2, pp. 160-168. https://doi.org/10.1108/JFRC-03-2018-0041