Keeping an eye on corruption is important.
General counsel, corporate secretaries and compliance officers should start taking a more proactive approach to dealing with corruption risk. Sure, there are other priorities on the governance agenda but many professionals fail to realize that regulators are sharing information across multiple jurisdictions and are now working closely together to manage corruption risk worldwide. In essence, the number of enforcement actions has increased significantly and it seems the authorities have no plans to slow down anytime soon.
A recent survey from global business advisory firm AlixPartners finds that more than two thirds of general counsel and internal compliance officers have actively reassessed anti-corruption risks in response to Dodd-Frank and the UK Bribery Act. However, these governance professionals have encountered three major roadblocks to implementation of anti-corruption programs: inadequate staffing/resources; variation of policies/procedures in different jurisdictions; and the fact that for many companies compliance is a relatively low priority.
The shortage of resources in the face of ever-growing demands means general counsel and corporate secretaries are under increasing pressure to do more with less. According to the report, despite efforts to prevent corruption risk through employee training and conducting due diligence of foreign business partners, a staggering 46 percent of governance professionals say their companies have inadequate staffing to deal with training and due diligence issues.
So how should general counsel and other professionals tackle the emerging issues associated with corruption risk?
Harvey Kelly, managing director of AlixPartners and head of the firm’s global corporate investigations practice, provides the following tips to governance officers to help overcome regulatory hurdles:
• Recognize that each country and market in which you operate has its own distinct business practices. Practices that represent violations of anti-corruption laws in one country may be normal ways of doing business in another.
• Provide internal audit and compliance professionals with tools and knowledge (including language and business practices) to monitor the company’s compliance requirements against its policies and protocols.
• Continually evaluate the effectiveness of anti-corruption compliance policies and procedures to account for changes in laws and business objectives.
• Use the discovery of a corruption problem to determine whether it is symptomatic of a larger problem. A more extensive analysis of risk exposure will allow the organization to evaluate its global operations and businesses to identify other red flags.
In short, governance professionals are often so caught up with implementing anti-corruption programs and trying to optimize resources that they fail to test the adequacy of those programs. But effectiveness is the key. So what are you doing to effectively and efficiently tackle emerging issues associated with corruption risk?
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To view the report, click here.
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