Are you ready for the Bribery Act 2010 (“the Act”) which will finally come into force on 1 July 2011? To help you, we summarise below the main points that HR professionals and in-house counsel should be thinking about to ensure their organisations are in the best position to defend themselves against any offences under the Act, and that employees are well-informed about its implications.
As said in our previous alert “The Bribery Act – what it means for you”, the Act sets four offences:
- Offering, promising or giving a bribe;
- Requesting, agreeing to receive, or accepting a bribe;
- Bribing a foreign public official; and
- Failure of a commercial organisation to prevent bribery.
An organisation will be guilty of the last of these four offences (the “Corporate Offence”) where an “associated person” bribes another person with the intention of obtaining business, or an advantage in the conduct of business, for that commercial organisation. The organisation will have a defence to the Corporate Offence if it can show that it had in place “adequate procedures” designed to prevent bribery.
In March 2011, the Ministry of Justice published guidance to the Act (“Guidance”) as set out in our alert “The Bribery Act 2010 – Adequate Procedures Guidance”, which set out six principles for organisations to follow to ensure compliance with the Act, including ensuring Proportionate Procedures are in place and providing Communication to Staff.
Checklist of action points
Below, we have put together a checklist of some of the recommended actions which might assist in making sure that your organisation is in the best position to show that it has “adequate procedures” in place.
Review the Staff Handbook
- The organisation’s Disciplinary Policy could be adapted to deal with any breaches by employees specifically in relation to the Bribery Act 2010, so that action can be taken in respect of such breaches.
- Separately, and possibly outside the Staff Handbook, organisations should consider implementing an Investigation Procedure to be followed where an employee is suspected of having committed one of the offences, which might be led by an external party.
- Changes to the organisation’s Whistleblowing Policy might also be needed to ensure that there is a clear channel of communication available for employees who become aware of possible breaches of the Bribery Act 2010 to raise their concerns.
- Depending on the results of any risk assessment carried out to establish potential problem areas within your organisation, it could be useful to consider the organisation’s Expenses Policy, and Hospitality Policy in light of potential risk areas such as management of expenses processes and providing hospitality to clients, customers or other contacts.
- Consideration should also be given to whether a comprehensive Anti-Bribery Policy or Statement of Ethics would be appropriate.
Consider changing your recruitment procedures
Organisations will need to examine recruitment practices to ensure that vetting and due diligence processes are adequate on recruitment, and to make sure that all appointments are independent and so unconnected to any improper or corrupt incentive. Training on the Act and all policies which are impacted within the Staff Handbook should be included at induction stage.
Educate your workforce
One of the principles set out in the Guidance is “Communication (including training)”, which means that organisations will be expected to educate their workforces about the Act. Additionally, any changes to the Staff Handbook should be shared with staff, so that they are aware of the relevant procedures. Another principle in the Guidance is to demonstrate “Top Level Commitment” to the prevention of bribery, and involvement of the Board members and senior level management in delivering training is a clear way to evidence this.
Review Bonus and Incentive Schemes
Bonus schemes should be reviewed to consider whether there is a risk of employees being inadvertently encouraged to ignore risks under the Act in pursuit of their targets. Additional provisions should also be included to confirm that bonuses will not be paid where there is any suspicion of bribery, where this could be a concern, until the investigation is complete and is established that the suspicion has no foundation. The same is true for commission and long term incentive schemes.
Reed Smith’s Employment Group and Reed Smith’s Global Regulatory Enforcement Group can assist by discussing with you the particular requirements of your organisation, developing and providing bespoke training for staff, reviewing and developing any staff policies and advising on the content of any bonus schemes.