Home – Bribery and Corruption Risk Increases for 2016

Bribery and Corruption Risk Increases for 2016

Posted on 03-17-2016 by Ulyana Androsova

 For the last five years, Ethisphere and Kroll have teamed up to conduct an annual survey of compliance professionals across the globe to understand the key anti-bribery and corruption (ABC) trends that impact companies. As this year’s title suggests global expansion and enforcement of ABC regulations promises to play a significant role in both the risks that companies face and the strategies that companies use to mitigate that risk. Let’s take a look at some of the survey’s findings.

 What’s Behind Growing Compliance Risk?

Among the survey respondents—more than 250 senior-level ethics or compliance executives hailing from public and private companies with global operations—40 percent anticipate an increase in bribery and corruption risks for 2016 and beyond. The reasons fueling their concern are ones you’ll likely recognize:

  • 55 percent cite global expansion plans within their own organization
  • 54 percent point to an increasing reliance on third parties
  • 51 percent identify greater enforcement of existing regulations

 We’ve talked about similar challenges here on the blog—from corruption scandals tied to global sports organizations to the risks of relying on poorly-vetted third parties to act on your company’s behalf in bribery-prone regions of the world.

 In addition, governments and organizations like the United Nations continue to introduce new  bribery, corruption, money laundering and forced labor laws and conventions, thereby increasing the complexity of compliance efforts, and, as noted above, leading to more, highly visible enforcement actions against companies and individuals.

 In fact, nearly one-third of the survey respondents report that personal liability is a burgeoning concern, particularly in light of the September 2015 “Yates Memorandum” which indicates that the Department of Justice intends to more vigorously seek out individuals accountable for corporate wrong.  Following the memo’s release, Deputy Attorney General Sally Q. Yates said that the Department of Justice’s goal is “not to recover the largest amount of money from the greatest number of corporations but to seek accountability from those who break our laws and victimize our citizens.”

 Compliance Risk on the C-Suite’s Radar

Despite these concerns, compliance executives seem optimistic about one trend—board and CEO engagement on anti-bribery and corruption strategies is growing. Nearly half of respondents report that their company’s board and CEO are “highly engaged” in ABC efforts, an increase compared to previous years. This is good news—although with 53 percent indicating lower engagement levels, there is still work to be done. When asked about the biggest risks to an anti-bribery and corruption program, the need for greater visibility was clear: 44 percent said “lack of buy-in” hampered ABC efforts, coming in second only to “outside forces” and tied with “lack of resources.” 

 Companies clearly have made some strides in developing robust anti-bribery and corruption programs, but challenges remain. Who is most confident?  According to the report, compliance professionals from companies that have a highly-centralized approach to ABC compliance strategies were 30 percent more confident in their ability to mitigate risk than those with a decentralized approach. One fact is clear: companies recognize that due diligence and on-going monitoring play a crucial role in mitigating compliance risk in today’s evolving, global business landscape.  What’s your confidence level?

 3 Ways to Apply This Information Now

  1. Check out this post on mitigating anti-bribery and corruption risk.
  2. Learn more about our solutions for helping you manage compliance and third-party risk.   
  3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

Comments


Anonymous
Anonymous
Posted on : 18 Mar 2016 2:12 PM

Great article and so much opportunity for growth in all our accounts!

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