It is a pessimistic view for sure, but these days it can often seem that we live in a world mired in bribery and corruption – a global society in which the name of the game is to get ahead, at any cost.
In its latest ‘Corruption Perceptions Index’, the global corruption watchdog Transparency International firmly states that global corruption is “still rife”, supporting its contention via the revelation that two-thirds of the 168 countries listed on the Index scored below 50 on a scale from 0 (considered highly corrupt) to 100 (considered very clean).
Providing further evidence is compelling analysis by Freshfields Bruckhaus Deringer, in its ‘Anti-bribery and corruption: global enforcement and legislative developments 2016’ treatise, which highlights a number of recent trends in anti-bribery and corruption enforcement. The report notes that this year has seen more and more countries bringing enforcement actions against companies, in many cases for bribing foreign officials.
Certainly, so far in 2016 there have been several high-profile examples of bribery and corruption on a grand scale. These include the magnum opus that is the Panama papers, a huge leak of confidential documents which reveal how the great and the good use tax havens to hide their wealth – a messy can of worms which, so far, has resulted in the resignation of Iceland’s prime minister and, ironically, that of the president of Transparency International’s Chilean branch, not to mention a considerable display of public anger.
The Kroll/Ethisphere Report
Alongside examples of malfeasance, analyses of the bribery and corruption landscape have also not been in short supply. One of these is ‘The Year of Global Expansion and Enforcement: 2016 Anti-Bribery & Corruption Benchmarking Report’ compiled by Kroll and the Ethisphere Institute.
The report, which showcases the views of senior-level ethics and compliance professionals across the globe, analyses the magnitude of the bribery and corruption risk and advises firms as to how they can stay on top of the risks they face. The extent of these risks is not inconsiderable: 40 percent of the compliance officers surveyed for the report believe that the bribery and corruption risks facing their companies will increase in 2016.
Furthermore, the compliance exponents cited two primary factors as contributing to the uptick in risks: global expansion and the ever-increasing number of third-party business relationships. Given the increasing number of third-party relationships involved in business activities, and the large percentage of enforcement actions rooted in payments facilitated through third-parties, one in four compliance professionals expressed no confidence in the ability of their company’s current controls to detect third-party violations of anti-corruption laws.
The Kroll/Ethisphere report also reveals that 54 percent of respondents felt their business was not appropriately prepared to comply with global bribery and corruption risks. Forty-seven percent felt they did not have enough resources to support their organisation’s anti-corruption efforts. Only 19 percent felt highly confident in their controls to detect third party violations of anti-corruption laws. However, 47 percent described their company’s leadership as highly engaged in anti-bribery and corruption efforts.
C-suite and boardroom engagement
The admission by compliance officers that the leadership element of their organisations is ‘highly engaged’ with anti-bribery and corruption efforts provides a positive note amid the report’s general pessimism, as well as an indication that compliance rates have changed considerably in recent years, with boardroom and C-suite engagement with the issue now much higher than that seen in previous years.
“Companies are clearly better prepared to address risk proactively when senior leadership engages,” said Erica Salmon Byrne, executive vice president of governance and compliance at Ethisphere. “It is heartening to see these numbers, which we believe reflect an understanding of the importance of this critical risk.”
The report also reveals that companies with engaged leadership teams are “more likely to believe their bribery and corruption risks will remain the same or decrease in the coming year” and are therefore likely to be “more confident” in their ability to handle the risks they face.
A persistent blight
Bribery and corruption remains a blight on the world, and the ongoing fight against it is complex and challenging.
Efforts to combat the escalation, such as Foreign Corrupt Practices Act (FCPA) cases prosecuted by the US Justice Department and the Securities and Exchange Commission (SEC), as well as the first Deferred Prosecution Agreement and first convictions under the UK Bribery Act 2010, are commendable enough, but much more needs to be done.
For now, as the spectre of bribery and corruption appears as daunting as ever, Transparency International has added its voice to the chorus of disapproval and made an impassioned anti-bribery and corruption rallying call. “Corruption can be beaten if we work together”, it proclaims. “To stamp out the abuse of power, bribery and shed light on secret deals, citizens must work together and tell their governments they have had enough.”
© Financier Worldwide