The increase in enforcement of national and international bribery and corruption legislation means businesses must demonstrate compliance.
Unfortunately there is no one-size-fits-all compliance strategy within global business.
Global organizations can be vulnerable when operating in multinational markets due to complexities that characterise the struggles to identify and deal with signs of bribery, corruption, and fraud.
The UK Bribery Act, which was passed in 2010, introduces an offence of corporate failure to prevent bribery. The defence for a company against this liability is to prove that it had adequate procedures in place to prevent bribery. With the right technology it is easier for employees to maintain everyday anti-bribery practice, which, in TI-UK's opinion, would constitute 'adequate procedures' for compliance with the Bribery Act.
This is not just clever rhetoric.
As recently as February, Rolls Royce was involved in a global scandal after allegations that it was involved in bribery and kickbacks at Brazilian Oil producer Petroleo Brasileiro SA. According to the testimony of a former Petrobras executive in a federal court in Parana State, Rolls Royce allegedly paid bribes via an agent to win a $100 million contract. This is not the first incident with Rolls Royce. Rolls Royce was already under investigation by the UK Serious Fraud Office for suspected malpractice in business dealings throughout Asia. A formal investigation was ordered in 2013 after the company had handed over details on its dealings in China and Indonesia that had prompted the investigation into bribery.
As the Rolls Royce report illustrates, there is a very real risk to global companies and companies planning to expand into global markets.
Here are three key areas to a successful compliance strategy that mitigates the risk of bribery:
- Tone at the top matters
People are at the centre on any compliance strategy. But “people” does not solely mean workers at the frontline; conversely compliance starts at the top of any company. The tone set by management is crucial in inspiring employees to invest in a compliance strategy. All successful companies have strong leadership but strong leaders are those who are aware of compliance regulations of the multinational markets within which they operate, and, crucially, are strong enough to resist shortcuts through bribery. It is only by setting a strong example will the rest of the team recognise the company’s commitment to compliance in global markets.
- Knowledge is power
More and more countries are implementing and enforcing anti-bribery laws. Consequently multinational corporations face liability in multiple jurisdictions, both in their domestic markets as well as foreign markets, sometimes for the same wrongdoings. A perfect example is News Corp. Despite being a US company, action was taken against News Corp by both US and UK regulators. This means facing potential liability under both the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. The way to counter this is by implementing the necessary processes and educating employees on how to manage these processes. This may include the adoption of new policies and enhanced financial controls, anti-corruption training, conducting risk assessments, audits and monitoring mechanisms. The key point, however, is that there is continuous review and improvement.
- Help your employees help themselves
Anti-Bribery mitigation is complex. It is now crucial to incorporate the blending of sophisticated anti-bribery technology with the necessary change management and awareness strategy that anti-bribery mindfulness demands. One way to be assured of this smooth transition is to ensure that employees have the best technology in place to support the company’s compliance objectives. This will impact upon the company in three key ways: it will prepare employees for the change; it will allow the leaders in the company to manage the change; and it will reinforce this change. The appropriate software will also allow the management of any resistance to change when implementing these new processes. The ability to monitor and assess the nature of the organization's operations within various markets, as well as the elements of business with government entities, will be crucial in proving that the company is complying with anti-bribery measures.
At the end of the day all successful businesses are proactive rather than reactive. Being proactive and integrating technology that mitigates the risk of non-compliance will save significant sums of money and prevent damage to the reputation of the company. Having the best technology in place will ensure that companies are able to mitigate the most substantial risks of corruption and bribery in domestic, national, and multinational markets while also enabling them to demonstrate compliance when requested.