Bribery Act means it’s no longer ‘business as usual’
By David Alexander, Director, Forensic Services at Smith & Williamson
Companies need to take swift action to ensure adequate procedures to prevent and detect bribery. For many years the US has led the way in investigating corruption through the Foreign and Corrupt Practices Act. The UK has been comparatively slow to update its legislation; however, with the introduction of the Bribery Act (the Act) this is about to change.
The Act introduces a new offence if companies fail to prevent bribery by employees, agents or persons connected to their business. The only defence available will be if the company can demonstrate it has, and maintains, adequate procedures to prevent and detect bribery.
Unless a business is a household name, it is tempting to think that the chances of being prosecuted are slim at best and that, therefore, you can conduct ‘business as usual’. This is a high-risk strategy. The Serious Fraud Office’s policy on self-reporting increases the chance that bribery will be reported and should a successful prosecution ensue there is a nasty sting in the tail in the shape of the Proceeds of Crime Act, not to mention the Money Laundering Regulations.
Most people would associate the Proceeds of Crime Act with depriving convicted drug dealers of their ill-gotten gains. However, it is equally applicable to businesses convicted under the Bribery Act. Conviction for paying a £100,000 bribe to win a £1m contract could result in a confiscation order to the gross value of the contract, and that’s on top of any fines imposed as a result of the conviction.
Businesses need to act now to ensure they have adequate systems and controls in place if they are going to both prevent bribery by employees and agents and defend themselves against the new corporate offence of failing to prevent bribery.
Here are some useful anti-bribery measures to implement in your business:
• Disciplinary procedures – explain clearly to staff the consequences of committing fraud.
• Reporting fraud to the authorities – make your company’s attitude to reporting fraud clear.
• Career counselling – consider how you manage the careers of your staff.
• Employee complaints – develop a communication system for employee complaints, this is by far the most likely avenue of discovering fraud.
• Employee participation in own performance goals – allow staff to feel they have some control over how their performance is appraised.
• Avoid excessive rewards and punishments for performance within your business – these can be strong drivers for fraudulent behaviour.
If you’d like to know more about what the UK Bribery Act will mean for your business, contact David Alexander on 020 7131 8290 or email email@example.com
Watch the video below featuring Guy Rigby, Head of Entrepreneurs at Smith & Williamson talking about how to manage your cashflow in your business
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