One of the biggest headaches facing companies conducting business overseas is bribery and corruption. The grey area of what is deemed a fair gift, meal or payment against what might be constituted a bribe is a challenge keeping senior executives up at night. And with the screws being tightened on enforcement of anti-bribery laws, such as the UK Bribery Act (UKBA) and US Foreign Corrupt (FCPA) Practices Act, this problem looks set to bedevil the industry for years to come.
Globalization is impacting almost every industry as businesses open up to opportunities outside narrow national boundaries, driven by challenges in domestic demand and the emergence of new high growth markets delivering wider talent pools, increased sales and lower costs. This trend has reinforced the ethics and conduct debate. Making payments to win business is customary in many emerging markets and some companies feel compelled to play the game to be successful.
The war waged against corruption has strengthened in recent years as governments around the world impose harsh laws to fight bribery in business dealings. The multi- jurisdictional reach of anti-corruption laws means companies can now be prosecuted for acts of bribery committed anywhere in the world. And turning a blind eye to corruption is no protection against liability.
The onus is on businesses to protect themselves from criminal prosecution. Corruption charges are not only a reputational issue. Conviction under the UK Bribery Act (UKBA) could lead to multi-million pound fines, and lengthy prison terms. On top of that, executives facing bribery charges abroad are subject to local penalties, ranging from life imprisonment to fines up to 100 times the bribe in addition to a jail sentence.
How can you actively develop a culture that prevents any violations from occurring in the first place? The role of Chief Compliance Officer is demanding and multi-faceted. Part circus ring-master, part detective, they must juggle policy, procedure, regulation and compliance whilst demystifying complex supply chains and third party risk. Diplomacy and legal expertise are also requisite skills for managing the expectations of board and demands of auditors and regulators.
Guidance for meeting bribery and corruption risk
Proving ‘adequate procedures’ is easier said than done. Communicating policy, procedure, regulation and compliance to a multi-lingual workforce can be a logistical nightmare. Ensuring that they have been received, read and understood across jurisdictions by every employee, supply chain partner, and agents – and a compliance declaration received from each person – is a major challenge for any global company.
The only way that companies can demonstrate best practice and distance themselves from the actions of a rogue individual is to implement a bespoke technology based policy management solution that ensures a clear compliance audit trail for the benefit of the board, senior management, auditors and regulators. Mitratech’s PolicyHub software solution provides managers with the ability to prove beyond doubt to regulators, board members, and auditors that policies and procedure are accurately deployed, communicated and implemented. PolicyHub provides evidence that adequate procedures are not only in place but also professionally communicated to all stakeholders.