This month once again saw hundreds of junior infants heading off to school for the first time, small spines straining under the weight of new satchels and shiny lunchboxes filled with hummus and carrot sticks (to be replaced by ham sandwiches within days) with small arms barely poking out of the sleeves of school blazers that they may grow into, eventually. All fresh and eager to learn their ABCs…
So how are your ABCs? No, not the rudimentary elements of reading and writing; rather the fundamental building blocks of ethical business practice – your Anti-Bribery & Corruption procedures. Just as children have to learn basic rules to develop literacy and writing skills, so do executives need to fully understand their compliance responsibilities and be given the tools and training to equip them with the skills necessary to make ethical business decisions. Now more than ever.
Orange is the new black….
Two weeks ago, in a dramatic new step-up in the enforcement of the US Foreign Corrupt Practices Act, the Deputy AG Sally Yates issued a memo to all US attorneys, announcing a policy to prioritise the prosecutions of individual employees involved in corporate crime— not just their companies – and to put pressure on corporations to turn over evidence against those culpable executives. Add to this the trend in overseas enforcement. To date the focus has been squarely on the traditional hotspots of China, Russia, Africa, and Southeast Asia, but more recently there has been a clear uptick in anti-bribery activity across Europe to0 – all contributing to the eye-watering total of over $5b in fines collected in the last 5 years alone.
Closer to home, the London-based Serious Fraud Office secured its first conviction under the 2011 UK Bribery Act last December in connection with a Ponzi fraud scheme, with combined sentences of 28 years for the 3 men involved. The extra-territorial reach of this draconian piece of law should also not be under-estimated, particularly when you consider the UK is our largest trading partner by far.
And soon it will be our turn: the Criminal Justice (Corruption) Bill is waiting in the wings. When enacted, it will:
- Outlaw both giving and receiving bribes
- Cover both the public and commercial sectors
- Make corporate bodies liable for the corrupt actions of their directors, employees and agents
- Require those companies to “take all reasonable steps” and “exercise all due diligence” to prevent corrupt practices.
Oh – and directors and managers who “wilfully neglect” the commission of an offence will also be criminally liable. Potential sanctions: unlimited fines and penalties of up to 10 years in prison.
The sorry fact is that most Irish businesses are woefully unprepared. Now is the time for action.
Check your Kitbag:
At a minimum you will need to:
- Appoint a compliance lead and carry out a corruption risk assessment
- Put in place an anti-bribery policy and roll-out related training
- Embed anti-corruption controls and due diligence procedures
- Ensure an effective “whistleblowing” channel is available
- Review investigation and disciplinary protocols
- Initiate monitoring and review procedures for board and executive
Above all, as we all know, “culture eats strategy for breakfast”, there must be appropriate and genuine Tone from the Top. Without that it’s all talking but no walking.
And that’s the thing about ABCs – there is simply no room for an F.
In the IMI we have developed a specialised Diploma in the Management of Compliance, which is designed to help both organisations and individual managers to meet the challenges of doing the right thing – everywhere.
Ros O’Shea is the Programme Director of the IMI Diploma in the Management of Compliance and lectures on the topic of ethical leadership and governance on a wide range of IMI. She is also an independent director and a partner in Acorn Governance Services.