Every Business needs an Anti-Corruption Program
The UN Global Compact’s (UNGC) 10th principle on Anti- Corruption states “Businesses should work against corruption in all its forms, including extortion and bribery.” UNGC further suggests elements that companies may consider in implementing the 10th principle. The first of these elements is to address the “Internal” by introducing anti-corruption programs (ACP) within an organization and business operations.
Although a company may not be a signatory to the UNGC, it is good practice to have a commitment to countering corruption evidenced by having an ACP. The benefits include reduced risk of being fined or found guilty of bribery, a culture of business integrity and a reputation with stakeholders for being an ethical company. For companies just starting out, what does a good anti- corruption program look like in practice?
A compliance program should be adapted to company peculiarities such as corruption risk, size, structure, activity, geography, industry as well as jurisdiction and other basic legal principles under which a company operates.
According to Global Accounting Firm, Ernst & Young, “three aspects of a holistic anti-corruption program includes setting the proper tone at the top through policies and procedures, proactively identifying corruption risks and monitoring internal controls to prevent or detect the risks, and developing reactive protocols in the event that corruption is suspected”. Anti-corruption policies should cover such areas including gifts, charitable and political donations, use of intermediaries and an avenue for raising concerns such as a whistleblower policy, etc. To ensure widespread adoption, the organization must also create training, awareness and communication to ensure that all staff understands and adopts the ACP policies and procedures.
According to the OECD Good Practice Guidance On Internal Controls, Ethics And Compliance, other elements of a sound ACP include“ a system of financial and accounting procedures, including a system of internal controls, reasonably designed to ensure the maintenance of fair and accurate books, records, and accounts, to ensure that they cannot be used for the purpose of foreign bribery or hiding such bribery;” and appropriate disciplinary procedures to address, among other things, violations, at all levels of the company, of laws against foreign bribery, and the company’s ethics and compliance programme or measures regarding foreign bribery”.
Although it is not compulsory, it is important that an external party verify a company’s ACP. The UNGC advises the “use of independent external assurance of anti-corruption programmes” to “provide the organization with valuable insight into the strengths and weaknesses of its programme.” Also, The Justice Ministry’s comment on the UK Bribery Act guidance stipulates that an independent review may provide “insight into the strengths and weaknesses,” “identify areas for improvement,” and “enhance credibility with business partners or restore market confidence following the discovery of a bribery incident.”
In sum, in a day where there is rising consensus on the need for businesses to participate in collective action to stem corruption, a sound Anti- Corruption program is a must and while it is not yet law in all regimes, businesses need to be proactive in managing their corruption risk. Click here to view a sample checklist of an anti- corruption compliance program.