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Lecture 12

LAW 533 Lecture Notes - Lecture 12: Embezzlement, Royal Canadian Mounted Police, Active Measures

Law and Business
Course Code
LAW 533
Kernaghan Webb

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Law 533 Guest Lecture Jennifer Egsgard Notes
Corruption: misuse of public power for private profit, or misuse of entrusted power for
private gain. Includes bribery, embezzlement and laundering of funds. 3 types:
1. Grand corruption (highest levels of a country, benefit of an official at the expense
of the public)
2. Petty corruption (paying to avoid a long wait at a hospital)
3. Political Corruption (sustaining their power, wealth and status)
Social impacts: political
-Obstacle to democracy
-Undermines rule of law
-Offices/institutions lose legitimacy
Social impacts: economic
-Deplete national wealth
-Misallocation of scarce resources (money not spent efficiently to benefit public, &
projects may not be selected in response in community needs)
-Hinders development of fair market structures/distorts competition/deters
Social impact – also erodes social fabric/ encourages apathy
-Also environment degradation
How does corruption harm corps?
-Macroeconomic – reduces efficiency by distorting competition and depriving buyers of
economically superior products at the most competitive prices. For example, if you want
to spend a lot on R&D then you develop the product and it is amazing. But if another
product gets selected because there was a bribe involved, it discourages innovation.
-Destabilizes political process/promotes conflict- if companies are paying bribes to pay
for permits, the decision making process more focussed on how the person issuing the
permit can benefit rather if its safe/beneficial for the community.
-Taints corporate culture. Every corp. should be operating transparently, continuous
disclosure etc. bribes go against this.
-Cannot hold bribe-takers to account. Once engaging in bribery, your legal rights are
Anti-corruption and csr
-anticorruption standards can have positive impact on other csr goals. Engaging in csr
activities without protecting against corruption can result in poor results, loss of goodwill
and legal liability. If a company is trying to implement and ethical supply chain, the
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