Companies headquartered in the UK are leading the way in respect of having a board level director with responsibility for anti-corruption
Many global companies, particularly those with operations in emerging markets, remain slow in changing their corporate approach towards corruption, according to Control Risks’ annual survey of business attitudes to corruption.
Control Risks surveyed more than 600 senior legal and compliance professionals from companies across the world to plot changing attitudes towards anti-corruption regulation and regimes.
The 2014-15 survey found a worrying disconnect between what the headquarters of multinationals believe about their anti-corruption programmes and what takes place at the front line in the higher risk markets.
The failure to reform internal practices is partly due to budgetary pressures on compliance teams, but many companies still underestimate the threat and the cost of getting it wrong.
Some improvement can be noted. Overall, 87.9% of firms now have company policies explicitly banning bribes to secure contracts, 44.8% of UK companies said they were investing in additional resources to combat corruption, compared to a global average of 37.9%.
The survey states that the introduction of the UK Bribery Act in 2010 is improving the way in which British companies do business abroad. Out of all the companies surveyed, those head-quartered in the UK are leading the way in respect of having a board level director or compliance committee with a direct and specific responsibility for anti-corruption – 64.6% of UK businesses surveyed fell into this category.
The UK is also the strongest when it comes to forbidding facilitation payments, that is small bribes to speed up government transactions, 85.4% of UK companies explicitly ban facilitation payments. This figure rises to 96.9%in relation to the outright ban on bribes to secure contracts.
However, the survey said compliance procedures from surveyed companies are still weak in respect of third-party suppliers and contractors, 81% of those surveyed in the UK have standard no-bribe clauses in their contracts with third parties. The wider global survey suggested that only two-thirds of all companies surveyed include no-bribe measures in contracts.
Commenting on the survey’s findings, Richard Fenning, chief executive of Control Risks said:
“Governments across the world are demanding more of companies in the fight against corruption. This is true even in markets where regulation and law enforcement capabilities are often under-resourced. Companies need to understand this change and take it seriously. Many companies do now have the compliance processes in place, but this is only half the battle. Companies are getting better at talking the talk. They need to walk the walk, and introduce the real changes in culture and process that will protect them.
“Without this, a real risk arises of companies sleep-walking into a major crisis”.