Examining Anti-Corruption Efforts: How Mexican Businesses are Addressing Compliance and Collaboration

This blog is part of a two-blog series discussing business integrity initiatives in Mexico. In part two, we explore specific compliance measures and internal controls that companies are implementing and how these practices align with international compliance standards and best practices. 

CIPE’s Anti-Corruption and Governance Center’s Program Associate Lydia Roeder spoke with CIPE Consultant Gabriela Blanco Munguia, a compliance and business integrity expert in Mexico, to learn more about how Mexican businesses are complying with anti-corruption legislation and how they are collaborating with other actors to combat corruption. This interview has been lightly edited for length and clarity. 

What compliance measures and internal controls do Mexican companies implement to mitigate corruption risks, particularly in high-risk sectors? 

Most Mexican companies implement compliance measures and internal controls based on the Committee of Sponsoring Organizations (COSO) framework. However, a lack of integration between auditing and internal control often weakens risk management. Companies tend to have more effective risk prevention and management systems in high-risk sectors with stringent regulatory demands. These sectors understand the importance of comprehensive compliance programs and have invested more in aligning with international standards and best practices. 

Some of the controls and measures that Mexican companies implement to mitigate corruption risks include: 

• Ethics and Compliance Training: Regular ethics and compliance training programs are used to educate all employees on compliance issues, ethical behavior, and anti-corruption practices. These training sessions foster a culture of integrity and ensure that employees understand their roles and responsibilities in preventing corruption. 

• Whistleblower Channels: Companies implement whistleblower channels that allow employees and other stakeholders to report any suspicious activities or violations of company policies confidentially. These channels are essential for detecting and addressing potential issues before they escalate. 

• Regular Audits and Monitoring: Regular audits and continuous monitoring of business operations are conducted to ensure adherence to compliance policies and procedures. These audits help identify any discrepancies or areas of non-compliance that need to be addressed. 

• Conflict of Interest Declarations: Employees must declare any potential conflicts of interest that could affect their judgment. This transparency helps prevent situations where personal interests could compromise ethical standards. 

• Compliance Committees: Establishing compliance committees that oversee the implementation and effectiveness of compliance programs. These committees review compliance issues, address concerns, and ensure continuous improvement in compliance practices. 

How do these programs align with international anti-corruption standards and best practices? 

Generally, Mexican companies’ internal control, compliance, anti-corruption, and risk management programs align well with international standards and best practices. By adopting globally recognized frameworks and guidelines, these programs ensure that Mexican businesses remain globally competitive and reputable. One example of a widely used framework is the ISO 37001 Anti-Bribery Management System, a standard designed to help organizations in over 171 countries implement and maintain effective anti-bribery management systems and promote cultures of integrity, transparency, and compliance. Another is the United Nations Convention against Corruption (UNCAC) treaty, the only legally binding universal anti-corruption instrument designed to help businesses in 190 countries prevent and control corruption. Moreover, adherence to these standards enhances trust and credibility with international partners, investors, and customers, strengthening the organization’s global presence. 

In addition to framework alignment, Mexican companies actively participate in international forums, collaborate with industry peers, and engage with global organizations to stay updated on evolving anti-corruption standards and best practices. This proactive approach allows them to continuously enhance their compliance programs, integrate lessons learned from global experiences, and benchmark against industry leaders. Furthermore, many Mexican companies undergo third-party assessments and certifications to validate their adherence to international anti-corruption standards, providing external assurance and validation of their commitment to ethical business practices. 

By aligning with international anti-corruption standards and best practices, Mexican companies mitigate corruption risks and contribute to a more transparent and ethical global business environment. This alignment fosters sustainable growth, enhances investor confidence, and promotes domestic and international economic development. As Mexico continues to strengthen its commitment to combating corruption, aligning its corporate compliance programs with international standards will be pivotal in advancing integrity and accountability across industries. 

How do private sector entities collaborate with government agencies, Civil Society Organizations (CSOs), and other stakeholders to combat corruption? 

Collaboration between private sector entities, government agencies, CSOs, and other stakeholders is crucial for combating corruption. Although limited in number, CSOs have conducted valuable research and exposed corruption using public information. However, these organizations often face challenges in receiving adequate support and recognition. Moreover, the current system in Mexico does not fully integrate these organizations into public functions and often views them as adversaries. This disconnect hampers the potential for effective collaboration and undermines efforts to combat corruption. 

Are there any industry-specific initiatives or alliances focused on promoting transparency and accountability? 

Yes, in Mexico several industry-specific initiatives and alliances are focused on promoting transparency and accountability: 

• Codes of Integrity and Business Ethics: Many business chambers, such as the Consejo Coordinador Empresarial (CCE) and the Confederación Patronal de la República Mexicana (COPARMEX), promote codes of ethics and business conduct that foster transparency and accountability. 

• Extractive Industries Transparency Initiative (EITI): Mexico is part of this global initiative, which promotes transparency in the management of natural resources and ensures that companies in the extractive sector operate with clear accountability standards. 

• Instituto de Control Interno (ICI): The ICI is an organization that works with companies to improve their internal control and compliance systems. It promotes internal audit and control practices that reinforce organizational transparency and accountability. 

• Integridad Corporativa 500 (IC500): This initiative evaluates and ranks the most competitive companies in Mexico, considering factors such as transparency, business ethics, and accountability. It encourages companies to adopt best practices and strive for high standards of performance and responsibility. 

However, the effectiveness of these initiatives often falters at the implementation stage, highlighting the need for better execution and follow-through. Ongoing efforts are necessary to ensure that these industry-specific initiatives translate into tangible improvements in transparency and accountability practices across various sectors in Mexico. 

Image Credit: Mikhail Nilov, pexels.com