Mon, May 18, 2015

Global Expansion is at the Root of Increased Bribery and Corruption Risks Say Compliance Professionals

2015 edition of Kroll Benchmarking Report reveals lack of confidence in financial controls to catch potential FCPA violations

Roughly half of all compliance officers surveyed expect their company’s bribery and corruption risks to increase in the coming year, according to a new report from Kroll and Compliance Week. In a survey of senior-level compliance professionals, 72 percent of those who expect risks to increase say it’s because their business will be expanding into new, unfamiliar markets. However, while 65 percent say their business will increase the number of their third-party relationships, 48 percent say they never train third parties on anti-bribery and corruption. This is an alarmingly high figure given the number of enforcement actions regulators take that involve third parties.

“While there has been phenomenal progress in the extent to which anti-bribery and anti-corruption issues have now made it on the training agenda for most large organizations, that’s still not really the case when it comes to training third parties,” says Kevin Braine, managing director with Kroll’s Compliance practice in EMEA.

There is also some good news in the 2015 Anti-Bribery and Corruption Benchmarking Report. Only 8 percent admit to not performing due diligence to hire/retain a third party, and most companies seem to employ risk-based factors when deciding how much diligence to perform. Fifty-eight percent rate their due diligence procedures as either effective or very effective.

“Due diligence is really one of the keys to any type of compliance program, whether related to human trafficking, conflict minerals, anti-bribery and corruption, or anti-money laundering. It is one of those elements that cuts across all of those obligations,” says Lonnie Keene, managing director with Kroll.

The 2015 Anti-Bribery and Corruption Benchmarking Report also includes the following findings:

  • More than 50% anticipate the bribery and corruption risks to their company will increase
  • 66% automate their anti-corruption program in some way
  • Most automated tasks are limited to training; only 26% automate the vetting of third parties
  • A majority (52%) are not confident in their financial controls to catch potential books-and-records violations of the FCPA

To obtain a copy of the report from Kroll and Compliance Week, or to speak with a Kroll representative, please contact:

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Compliance Risk and Diligence

The Kroll Investigations, Diligence and Compliance team partners with clients to anticipate, detect and manage regulatory and reputational risks associated with global ethics and compliance obligations.