Lessons Learned
The Krakatau Steel case teaches us several important lessons regarding business ethics and financial oversight:
1. The Importance of an Ethical Culture:
Companies must build a culture that places ethics at the forefront. This should be done through continuous training, strict ethical codes, and leadership committed to ethical behavior.
2. Strict Oversight:
The audit function, both internal and external, needs to be strengthened to prevent fraud. Additionally, the implementation of technologies such as digital monitoring systems can help close gaps that could be exploited for unethical behavior.
3. Firm Sanctions:
Ethical violations must be met with strict sanctions, both legally and within the company. This ensures that unethical behavior is not repeated and serves as a deterrent to others.
4. The Role of Government Regulation:
The government must ensure that procurement regulations, particularly in state-owned companies, are strictly enforced. External oversight from authorities could be one way to minimize the risk of corruption and budget inflation.
The Krakatau Steel procurement scandal is a prime example of how weak financial oversight and the disregard for business ethics can have detrimental effects on a company and the public. Through improving corporate governance and tightening financial oversight, companies, especially those under state management, can regain public trust. Business ethics is not just about following the rules, but about building trust and maintaining the integrity that forms the foundation of long-term success.
