Newsletter | Volume 1

Issue I
Issue II
Issue III
Issue IV
Issue V
Issue VI
Issue VII
Issue VIII
Issue IX
Issue X
Issue XI
Issue XII
Issue XIII
Issue XIV
Issue XV

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Strengthening FCPA and UKBA Enforcement

There are always umpteen examples of the enormous costs of companies behaving badly as far as bribery and corruption compliance is concerned. Effective compliance, governance and ethics programs are a means to reduce such costs. Another useful method fosters a culture in enterprises where unethical behavior is either prevented, excluded, detected and resolved promptly. Businesses can also provide encouragement thru a proper mix of incentives. Carrot and stick philosophy is inadequate.

It is always premature and unrealistic to suggest that bribery, fraud and corruption (BFC) will be significantly reduced as a result of the introduction of a business' compliance and ethics program. Such a program is just the first step. The BFC journey first begins here. There are many other factors to get to the root of corruption. The next step is to scope the BFC program.

The third step is to ensure disclosure of anti-corruption programs; both enforced, monitored and audited. The assumption however is that businesses have the framework, roadmap and other relevant mechanisms in place to recognize that when a Bribery or Corruption disclosure is not in compliance with the companies transparency policy.

The business is then ready to take collective action after achieving BFC issue identification. The next stage of work is the implementation phase with in-depth analysis of BFC processes, third party supervision and monitoring, and benchmarking. First at this next stage the program will deliver tangible and measurable results.

After implementation come disclosures
In many countries, this is not a simple and straightforward process because fairness and transparency of the BFC process is not possible. There must be an adequate internal retribution when a disclosure is neglected and nor being reported to the right internal monitoring office or oversight. In many other instances, it gets more complicated, when determining if the Bribery or corruption mistake, error or information that is reported is also truthful. One way to handle such an issue is to review/examine the report or information and to perform random audits.

In many countries, the likelihood of oversight or government authorities discovering illegal corporate conduct like bribery and corruption is low. The carrot and stick approach provides an incentive for companies to establish effective compliance and ethics programs, but only to a degree that such entities believe they will get caught breaking the law.

The odds of getting caught breaking the law
The result is often that compliance programs have no real effect in helping companies prevent risky behavior. They do little to protect the public from the enormous costs of compliance misconduct. There can be no perfect solution to this problem, as the nature of BFC risk ensures that there will always be dangers in the future that we cannot possible foresee and prepare for today.

With corruption being one of the greatest risks facing multinational companies today, transparency of anti-corruption programs in the private sector may be the best place to start.

Therefore achieving the right level of accountability and transparency is an appropriate option. Not only does it motivate employees and officers take greater ownership for the work to reduce their risk of severe behavior by implementing effective compliance and ethics programs, regardless of their odds of getting caught breaking the law.

"Success" in raising business standards is achieved not by reducing BFC crime as by creating the right conditions to reduce corruption... or by increasing trust.

Bribery and corruption session