Kleptocracy is a system that benefits a few over the population as a whole. It is a term usually used for governments but it can be used for corporations.
Russia would be a well known kleptocracy. Russian people pay taxes and the tax revenue is used on projects that hire corporations whose executives are supporters of Vladimir Putin. Not only are Putin’s supporters winning contracts over non-supporters even when qualifications and price would support the non-supporters over a supporter, but also the executives are spending the funds in such a way so that it benefits them directly. These executives are using these funds to build themselves houses and buy expensive things. recently, a few government ministers have been found to own recently built expensive mansions, which does not make sure considering their background of having no money and their positions not affording them such funds. This is another direct kleptocratic method.
It is a little more difficult to use it for corporations. The use of corporate funds for direct personal gain would be fraud and embezzlement, but if it is systemic, it would be kleptocracy.
About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.