Having loomed large over the horizon since April 2010, the UK Bribery Act finally came into effect on 1 July 2011. However, despite growing awareness of the dangers of corruption and bribery, many compliance executives at UK and US companies say it is part and parcel of doing business in certain countries. A recent survey conducted by KPMG has found that many of these companies have opted to develop anti-corruption programs to mitigate the risk of doing business in countries where bribery and corruption are endemic, rather than avoiding these markets altogether.
According to the survey, many of these programs have significant shortcomings. For instance, despite the risks of working with third parties in some countries the survey found:
- Two in five US and UK organisations with written anti-bribery and corruption policies do not distribute them to agents, distributors, brokers, suppliers or other similar parties.
- Three in five companies with such compliance programs that incorporate employee training do not require any third party representatives to participate in the training.
- Three in five companies do not exercise "right to audit clauses" in third party contracts.
Additionally, in respect of how such policies are developed, implemented and maintained the survey found:
- One in five respondents said their companies don't have communication and training programs.
- One in two of the respondents' organisations don't have a committee responsible for overseeing anti-bribery and corruption compliance.
- A third of companies do not perform anti-bribery and corruption risk assessments.
Brent McDaniel, head of KPMG's UK Anti-bribery and Corruption practice, explained "many multinational companies seeking to expand their markets or supply chains to certain areas of the world often are met there by an official … looking for a bribe or some other favour."
Mr McDaniel also highlighted pressure from stakeholders as an obstacle against anti-corruption compliance: "Doing the right thing becomes even more difficult when facing increased stakeholder expectations for a better return on investment that requires continued expansion to remain competitive in an increasingly global society."
The full report can be viewed at:http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/Advisory/23816NSS_Global_ABC_Survey.PDF