Legitimacy versus Illegitimacy — Transparency, Integrity of Financial Markets and Corporate Governance: Whither Corruption?

3 Kuwait Int’l L. J. of Sharie‘a Studies & Research 12 (2016)

Indiana University Robert H. McKinney School of Law Research Paper No. 2016-30

16 Pages Posted: 2 Aug 2016 Last revised: 31 Aug 2016

See all articles by Mohamed A. Arafa

Mohamed A. Arafa

Cornell University - Law School; Universidade de Brasília (UnB); Alexandria University - Faculty of Law; Indiana University Robert H. McKinney School of Law

Date Written: May 31, 2016


Ethics management globally is a swiftly growing reality with various countries placing substantial emphasis on anti-corruption initiatives. International organizations, including the United Nations (“UN”), Transparency International (“TI”), and the Organization for Economic Cooperation and Development (“OECD”) have created a number of anti-corruption creativities, for instance, the UN, promulgated an International Code of Conduct for Public Officials in 1996. Moreover, the United Nations International Center for Crime Prevention has established an Anti-Corruption Tool kit to help U.N. Member States and the public to understand the insidious nature of corruption, the potential damaging effect it can have on the welfare of entire nations and suggest measures used successfully by other countries in their efforts to uncover and deter corruption and build integrity. In the same vein, TI, the only global non-governmental organization dedicated to battling corruption, seeks via education and information to dishearten corrupt activities and fraudulent performances as well as foster integrity and liability to achieve better governance.

In addition, The OECD have long history in the front of endorsing good governance. That OECD was involved in pushing forward the 1997 Anti-Bribery Convention that is the first universal device to combat corrupt acts in cross-border business transactions. Also, OECD approved a proposal to advance ethical conduct in the public service that encompass “Principles for Managing Ethics in the Public Service,” as these norms are intended to be a reference point for state members when merging the fundamentals of an active ethics management system in line with their personal political, managerial, and cultural settings.10 Ethical laws and codes of conducts are extensively used apparatuses in the universal moral values supervisor’s toolbox. Against this succinct backdrop, this article examines how the gaming of laws and regulations by corporations contributes to the problem of institutional corruption in the business world. Also, it deals with a brief explanation of the various concepts of CSR in literature emphasizing its basic principles in fighting corporate corruption and is accompanied with an evaluation of the CSR performs that exist in the fields of human development, social growth, and environmental consciousness. Finally, it examines the role of CSR in fighting unethical conduct, especially corruption, through anti-corruption and anti-bribery programs, along with other defensive measures for contending this phenomenon with particular emphasis on the 2003 United Nations Convention Against Corruption (“UNCAC”). To elucidate the analysis, it focuses on the following two sets of inquiries: First, are corporations accustomed with the relevant soft-law instruments and the anti-corruption worldwide documents?; How do they perceive these documents?; What impression, if any, have these conventions had on enterprises?; Have businesses attuned their performance as a result? Second, have corporations willingly implemented ethical codes or other internal measures that endorse CSR?; Is CSR a useful, convenient, and effective tool in confronting corruption generally?; If so, to what extent? This article concludes in by arguing that CSR should be a priority among practitioners and specialists in fighting unethical corporate behavior and promote a clean corporate manners around the globe, mainly in the MENA region.

Keywords: Corruption, Ethics,Transparency, Integrity, Arab Spring, Globalization, UNCAC, Corporate Governance, Criminal Law

JEL Classification: Corporate Finance and Governance (G3)

Suggested Citation

Arafa, Mohamed A., Legitimacy versus Illegitimacy — Transparency, Integrity of Financial Markets and Corporate Governance: Whither Corruption? (May 31, 2016). 3 Kuwait Int’l L. J. of Sharie‘a Studies & Research 12 (2016); Indiana University Robert H. McKinney School of Law Research Paper No. 2016-30. Available at SSRN: https://ssrn.com/abstract=2816605

Mohamed A. Arafa (Contact Author)

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

Universidade de Brasília (UnB) ( email )

Campus Universitário Darcy Ribeiro
Asa Norte
Brasília, Distrito Federal 70910-900

Alexandria University - Faculty of Law ( email )

Moustafa Mousharafa Street

Indiana University Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States

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