Why does integrity matter?

There are two main ways of answering this question: the negative and the positive answer.

First, what happens when there is an absence of integrity? Vital public services such as education, health, water, and sanitation, the rule of law and and public safety are easily compromised by corruption, a lack of accountability, incompetence and unethical behaviour. In fact, up to 17% of GDP (gross domestic product) in developing and war-torn countries is lost due to corruption, fraud and mismanagement. Conservative estimates put this loss at more than USD 1 trillion a year. We know that this impacts poor people the most and can destabilise fragile contexts, home to 1.5 billion people. Aid and government projects in developing countries can conservatively be estimated to lose on average between 10 – 25 per cent of the value of a project to fraud, corruption and mismanagement.

Irrespective of the context, the cost to companies and organisations that fail on integrity is extremely damaging in terms of the legal penalties, damaged reputations, and the cost of doing business.

The second way of answering this question is to understand the incredible benefits of integrity and why an institution should make conscious, informed investments to strengthen integrity: Ultimately, the answer to the second question comes down to trust. Integrity enhances trust and trustworthiness with all internal and external stakeholders, including employees, citizens, suppliers and customers. And when trust is high you reduce transaction costs and compliance becomes easier. Innovations in integrity can be a game-changer because they can enhance or even create trust where there was none before. This is as true for a company or an NGO as it is for a politician or a government agency. An integrity innovation is a tool or systems change that enhances integrity with key stakeholders. This can make all the difference between struggling to succeed and having a transformative impact in stakeholder relationships, markets and countries that did not seem possible before.