Four years after the Bribery Act 2010 (the Act) came into force with the aim of improving corporate governance and propelling the UK to the forefront of anti-corruption and compliance marketplace, the Ministry of Justice (MoJ) and the Department for Business, Innovation and Skills (BIS) has commissioned a report to assess the impact and awareness of the Act in the SME community.
Published on 1 July 2015, the full text of the report entitled “Insight into awareness and impact of the Bribery Act 2010 among small and medium sized enterprises (SMEs)” can be found at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/440661/insight-into-awareness-and-impact-of-the-bribery-act-2010.pdf
We set out some of the key findings from the report’s executive summary below:
- Two-thirds (66%) of the SMEs surveyed had either heard of the Bribery Act 2010 or were aware of its corporate liability for failure to prevent bribery.
- Of that 66%, around eight in ten SMEs (81%) were also aware that the Act has extra-territorial reach.
- Again, of the 66% of SMEs that were aware of the Act, three-quarters (74%) of SMEs that were aware of the Act were not awareof the MoJ guidance published in March 2011 to help commercial organisations understand the procedures they can put in place to prevent persons associated with them from bribing.
- Surprisingly (or worryingly, depending on your vantage point), despite the fact that 74% of SMEs that were aware of the Act were ignorant of the existence of the MoJ guidance, almost three-quarters (72%) of that 66% of SMEs that were aware of the Act perceived that their company had sufficient knowledge and understanding to be able to implement adequate anti-bribery procedures.
- Those figures may make disconcerting reading for compliance officers in SMEs when they consider that:
- of those SMEs that were aware of the MoJ guidance, three quarters (75%) had read the guidance and the majority of these (89%) reported that they found the guidance to be useful;
- only a third of SMEs (33%) had assessed the risk of being asked for bribes, leaving just under two-thirds that had not assessed the risk of being asked (59%);
- only around four in ten SMEs (42%) said that they had put bribery prevention procedures in place; defined as anything that they thought helped prevent bribery;
- only around a quarter (24%) of SMEs who were aware of the Act or its corporate failure to prevent provisions had sought professional legal advice; and
- almost all (96%) of SMEs that had sought professional advice found the advice that they received useful (58% very useful and 38% fairly useful) and good value for money (45% very good value for money and 45% fairly good value for money).
In summary, therefore, whilst awareness of the Act and its risks for SMEs is growing, there is still a worrying disconnect between the level of protection that SMEs believe they have in place against bribery and corruption and the level of protection that they actually have in place.
Failing to undertake basic steps (like undertaking a risk assessment) to ensure that whatever policies and procedures they have put in place are actually effective when there is MoJ guidance and useful legal advice available at a cost that represents good value for money makes little commercial or economic sense.
Perhaps the findings in this report will persuade SMEs to allow external advisors to evaluate what policies and procedures they have in place, which process of continuous review is also best practice for companies wishing to avail themselves of an adequate procedures defence to a section 7 corporate liability offence.