BY Fraser Tennant
More than half of the world’s biggest companies reported “very significant” impacts as a result of the impact of corruption and illicit activity in 2020, reveals a report published this week by Kroll.
According to the ‘Global Fraud and Risk Report 2021Bribery and Corruption: The Winds of Change’, 57 percent of respondents at companies with a turnover of more than $15bn reported a very significant impact of illicit activity, such as fraud, corruption and money laundering.
Kroll also found that global organisations were feeling vulnerable to both internal and external threats, with 46 percent of respondents citing lack of visibility over third parties as the number one threat relating to bribery and corruption risk. Weaknesses in internal record-keeping was second on the list, followed by employees’ actions.
To combat this, companies were placing an increased focus on proactive measures to manage bribery and corruption risk, including enterprise-wide risk assessments and the use of proactive data analytics. However, despite these defences, 82 percent overall still felt corruption and illicit activity were having a significant impact on their organisation.
“It has been an unprecedented year for corporate risk,” said Zoe Newman, managing director of forensic investigations and intelligence at Kroll. “Firms have faced threats from all angles, including increasingly complex supply chains and the impact of COVID-19 measures.
“The findings from our report leave us with an important question,” she continued. “Why are bribery and corruption threats persisting and still having such a big impact? Poor record-keeping or the inability to adequately monitor frontline teams and regional offices are typical vulnerabilities that are often overlooked. Then there is the human factor.”
More encouragingly, the report found that many companies are bolstering their defences with proactive measures such as data analytics, and that bribery and corruption risk is on the boardroom agenda.
Ms Newman concluded: “An organisation can have the best possible compliance programme in place on paper, but if the human elements of the chain are not well managed, educated or equipped to act, non-compliance or illicit behaviour will continue to prevail and go undetected.”
Report: Global Fraud and Risk Report 2021Bribery and Corruption: The Winds of Change