Corruption risk calls for a balanced and intelligent approach that fits both the business and its pocket.
Companies risk severe and sometimes catastrophic reputational and financial damage because of bribery scandals. Multinationals risk being subject to multiple multimillion dollar fines imposed by enforcement authorities in numerous jurisdictions. The impact can hit individuals too. Board members who have been part of the scandal and failed to prevent or detect the corruption that followed are at risk of personal prosecution, having their roles terminated, and being prevented from acting as company directors going forward.
Anti-bribery laws and their enforcement are expanding and strengthening at national and international level. Boards should act now to review their anti-corruption measures, including developing a robust proactive board-level strategy to address corruption risk.
We can assist by assessing the risks in your business, putting policies and procedures in place to address those risks and advising you as to how to best handle any issues that arise should the worst happen.
Be clear on corruption risk
5 questions to ask yourself
Have we elevated corruption risk to the boardroom?
Shareholders, banks, suppliers and other market participants expect multinational companies to demonstrate a strong commitment to developing a responsible corporate culture as part of a social licence to operate. Stamping out corruption is at the core of this expectation. In the eyes of the market, a management-level anti-bribery compliance policy is no longer sufficient. Are you meeting external expectations by tackling corruption risk from the boardroom? Is your board engaged and active in setting the right "top-down" approach for the organisation?
Have our anti-corruption policies been refreshed and updated in the past 24 months?
Your core policies (HR / anti-bribery / money laundering / gifts and hospitality / third-party relationships / whistle-blowing / training / business continuity / insurance) must be revisited periodically with the evolving corruption landscape in mind. You will need to ensure that systems are effective to ensure your board is always alert to corruption risk issues and is able to react quickly. Are your basic controls up-to-date and are your reporting lines working as they should?
Are we addressing the corruption risk profile of suppliers and agents?
Your suppliers, business partners, agents and consultants need to be examined and vetted for corruption risk and you need to include up-to-date corruption protection clauses in your contracts with these third parties. Can you be sure that the practices of your suppliers and agents comply with your high standards? Will suppliers help you to manage the fall-out from corruption and will they compensate you for your losses?
As our business grows, do we adapt our policies and controls?
As your business evolves, moving into new countries or product areas, or changing its scale or customer profile, its corruption risk profile changes so that strategies, policies and controls need to be revisited. Does this happen? Are global policies being adopted uniformly across new parts of the organisation? Are bolt-on acquisitions fully integrated?
What is our response plan if there is a corruption scandal?
When an incident breaks, an hour-by-hour response plan is needed across the organisation to ensure that business leaders, legal, compliance, HR, IR and PR teams work together as one. Should you undertake an internal investigation and will you have the benefit of legal privilege? What are your reporting obligations? Are you ready to step into action if a crisis breaks?