The Bribery Act 2010 came into force on 1 July 2011. It contains two general offences which involve either bribing or being bribed. In addition there is a new corporate offence which occurs when a commercial organization fails to prevent a "person associated" with it from bribing another person. An associated person is defined broadly to mean anyone who performs services for or on behalf of the commercial organization.
Can Pension Trustees Be Guilty?
Both individual trustees and corporate trustees can be guilty of committing the general offences. For example, if they accept particularly excessive hospitality which was intended to induce the trustees into acting in bad faith, then they may have committed an offence.
The corporate offence does not apply to individual trustees. A corporate trustee could commit the corporate offence if it is considered to "carry on a business". Whilst a professional corporate trustee would almost certainly be considered to carry on a business the position is less clear for non-professional corporate trustees. Our advice is that corporate trustees should assume they are caught within the net and could be found guilty of the corporate offence in the right circumstances. It will be a defense if the corporate trustee can show it had adequate procedures in place designed to prevent persons associated with it from bribing.
What Should Trustees Do?
In practice pension trustees are unlikely to commit an offence under the Act. The vast majority of instances of hospitality offered to trustees would be considered acceptable. However, as a matter of good practice we recommend that trustees consider taking some or all of the steps below. Any steps taken should be proportionate to the likelihood of committing an offence under the Act. As a minimum trustees should take time to understand and record their own approach to corruption and bribery.
- Adopt an anti-bribery policy including details of procedures in place to prevent bribery by associates (it may be easiest to adapt the company's policy on bribery).
- Add the risk of bribery to the trustee risk register and monitor regularly.
- Record instances of hospitality in the trustee conflicts register and establish criteria for appropriate levels of hospitality.
- Request a copy of associates' anti-bribery policies and get confirmation in any engagement letters of their anti-bribery stance, e.g. external scheme administrators.
- Ensure a good understanding of how associates obtain payment and remuneration.
The potential penalties under the Act are high: a maximum of 10 years' imprisonment and/or an unlimited fine.