Business Principles for Countering Bribery

As companies continue to focus on global expansion to take advantage of growth opportunities in emerging markets around the world, they may also become more susceptible to bribery. Many U.S.-based companies quickly discover that taking or offering bribes is an accepted and even expected business practice in many foreign nations.

However, the implementation of stricter domestic and foreign anti-bribery laws has resulted in increased enforcement and more severe penalties for offenders in recent years. Examples include leading pharmaceutical manufacturer Pfizer Inc. paying $60.2 million in 2012 to settle a federal investigation into the company’s alleged used of payoffs to win business overseas. In 2013 clothing retailer Ralph Lauren agreed to pay $1.6 million to resolve charges of making gifts to foreign officials in Argentina between 2005 and 2009.

Consequently, companies that do not develop effective anti-bribery programs are potentially exposing themselves to significant financial penalties, and in some cases, criminal prosecution.

Countering the bribery risk in your organization

A recent report prepared by Transparency International Social Accountability International entitled Business Principles for Countering Bribery offers guidance on how you can mitigate the risk of bribery in your organization. According to the report, the development and implementation of an effective anti-bribery program will not only reduce your susceptibility to bribery, but it will also go a long way toward enhancing your company’s reputation in the global marketplace, as well as earn respect and build credibility with employees, stakeholders, and business partners.

Elements of an effective anti-bribery program

The report identifies five key components that any effective anti-bribery program should include:

  • The program must clearly articulate the organization’s values, policies, and procedures it intends to use to prevent bribery from occurring.
  • The program should assess and address the particular risks that pertain to the organization, taking into account factors such as location, business sector, size of the enterprise, and whether intermediaries are used to conduct business on behalf of the organization.
  • The program should be developed in accordance with all anti-bribery laws that pertain to the jurisdictions in which the organization conducts business.
  • Input from employees, agents, and all other stakeholders should be sought during the program development process.
  • The organization should take appropriate steps to remain abreast of all events and emerging best practices that could impact program development and implementation.

Program scope

It can be difficult, if not impossible, to identify every potential risk of bribery that could impact your organization. However, there are a number of key areas that pertain to many organizations including:

  • Conflicts of interest
  • Political contributions
  • Charitable contributions and sponsorships
  • Facilitation payments
  • Gifts, hospitality, and expenses

Your risk assessment process should include an evaluation of your organization’s level of current or potential involvement in each of these areas. This will enable you to focus your anti-bribery program on countering the risks that pose the biggest threat to your enterprise.

Implementing your anti-bribery program

There are a number of steps you can take to ensure an effective implementation of your anti-bribery program:

  • Be sure that all board members and top executives are committed to the program and demonstrate their commitment through their words and actions.
  • Apply the program in all key business relationships.
  • Ensure all human resources practices and procedures reflect your organization’s commitment to preventing bribery.
  • Provide anti-bribery program training for employees and managers, as well as outside contractors and suppliers where appropriate.
  • Encourage employees and others to raise concerns and seek guidance regarding potential bribery issues.
  • Communicate the program to all relevant parties and encourage feedback.
  • Develop and implement a system of internal controls designed to counter bribery.
  • Consistently monitor and review your program and make upgrades when necessary.
  • Cooperate fully if authorities initiate an investigation into a possible occurrence of bribery involving your organization.
  • Consider having an external review of your anti-bribery program conducted by an outside party to verify its quality and effectiveness.

To view an example of an anti-bribery program that can serve as a model for your organization click here.

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