Global Survey Reveals International Companies' Widespread Failure to Keep Pace With Anti-Corruption Legislation
LONDON, September 13, 2013 /PRNewswire/ --
An international survey of over 300 senior in-house lawyers, conducted for Control Risks by the Economist Intelligence Unit (EIU), reveals companies have much to do to stamp out corruption within their businesses and ensure they do not fall foul of the increasingly tough stance adopted by regulators.
The survey reveals that:
- Only 50% of companies have procedures to check the background and reputation of business associates. This "due diligence" process is regarded by law enforcement as a vital measure to prevent corruption.
- Just 50% of global companies have policies banning 'facilitation payments' to suppliers and government agencies.
- 37% do not have a clause in contracts with sub-contractors and consultants forbidding bribes being paid on the company's behalf.
- Most respondents cited small 'operational' bribes as the main cause for concern. By contrast, less than a third referred to the 'classic' corruption risks associated with winning business.
International attitudes to facilitation payments may be changing, but companies can find themselves operating in an awkward transition period where there remains no clear consensus on how to deal with them. Because of inadequate internal processes, companies continue to be vulnerable to employees paying bribes without their knowledge. Companies are also insufficiently prepared should they be required to conduct a corruption investigation.
But bribery risks remain very real. Almost half of respondents thought it was possible, somewhat or very likely that they would need to investigate a suspected violation of anti-bribery laws in the next two years.
Commenting on the survey's findings, Richard Fenning, CEO of Control Risks, said:
"Corruption is one of the most significant challenges for international business. Organisations today find themselves under ever-greater scrutiny from regulators, the media, their customers, clients and employees who are demanding that they be able to demonstrate that they operate ethically and with integrity. Yet, despite tougher anti-corruption legislation being enforced ever more rigorously, standards of governance remain at best inconsistent.
"This is a challenging world for business - good companies may wish to comply with their countries' anti-corruption laws, but are disadvantaged by competitor companies not playing by the rules. But the impact of not having proportionate anti-corruption policies in a company can be severe - threatening their reputation and operations."
Notes to editors
About the survey
Control Risks and the EIU conducted a survey among general counsels and senior in-house lawyers from some of the world's largest companies. The 316 respondents were asked how they assess integrity risks, how they prepare employees to resist corruption and manage corruption investigations.
About Control Risks
Control Risks is a global risk consultancy specialising in political, security and integrity risk. The company enables its clients to understand and manage the risks of operating in complex or hostile environments. http://www.controlrisks.com
SOURCE Control Risks