Three years after the U.K. Bribery Act came into force, many businesses are still struggling to implement the procedures necessary to prevent corruption. Over a third of nearlyt 3,000 anti-corruption controls assessed by GoodCorporation were graded as inadequate in a recent study by the international business consultant.
GoodCorporation’s findings, detailed in, “Combating Corruption: are Businesses Doing Enough?," a white paper published in conjunction of the United Nation’s International Anti-Corruption Day on Dec. 9, suggest that anti-bribery procedures recommended by the Ministry of Justice are not being successfully implemented. Sixty-three percent of the anti-corruption due diligence procedures it evaluated were found to be inadequate. Although due diligence checks are vital, GoodCorporation found a high level of inadequate procedures in the control of third parties that will make businesses extremely vulnerable if they are prosecuted forbribery. “We predict that a wave of new corruption scandals is almost inevitable,” GoodCorporation director Leo Martin said of these shortcomings.
“The Ministry of Justice has made it very clear what they expect businesses to put in place to prevent corruption,” Martin added. “That so many of the recommended procedures are not being properly implemented should be a real concern for businesses. It weakens any corporate defence while aiding prosecutors to bring about a successful case.”
Even more worrying for businesses, the researchers say, is that a clear gap is emerging between companies that are succeeding in putting adequate procedures in place and those that are not. The study divided companies into four quartiles, according to their average grades. The disparity between the top and bottom quartiles was described as “striking,” with good companies significantly outperforming weaker ones.
Other key findings:
All companies in the top quartile could demonstrate a strong top-level commitment to implementing anti-bribery and corruption controls with clear policies that are widely and publicly communicated and a zero-tolerance statement from the board.
Anti-corruption due diligence is the hardest area to get right (63 percent inadequate) followed by communication and training (50 percent) government and regulatory affairs (45 percent) and human resources (42 percent).
Government and regulatory affairs departments are struggling to come to terms with implementing effective controls (45 percent inadequate) demonstrating that dealing with governments is still a very grey area that needs focus.
Training of sales intermediaries is a particularly week area with 63 percent of the procedures checked found to be inadequate.
The research was is based on the results of anti-bribery and corruption assessments carried out by GoodCorporation in a cross-section of industries including oil and gas, telecoms, defence, manufacturing and pharmaceuticals. Assessments were madeusing its anti-bribery and corruption framework, a list of 71 management practices to reduce the risk of corruption. Crafted with recommendations from the Organisation for Economic Co-operation and Development and Transparency International, the framework is based on the six principles outlined in the Ministry of Justice Guidance on the Bribery Act and is aligned with the U.S. Foreign Corrupt Practices Act.