More than half (59%) of board members say their anti-bribery and corruption policies do not work effectively, according to a new international study from Eversheds.
Eighty per cent of the senior executives involved in the research also confessed to uncovering corrupt business practices in their organisation, despite anti-bribery laws now being prevalent across the world, with an increased focus by prosecutors to bring charges.
The report paints a contradictory picture, where those at the top of companies understand the seriousness of these issues – for both profits and reputation – but are failing to back it up with adequate compliance programmes to prevent, monitor and manage corrupt behaviours.
Almost all respondents (95%) said bribery and corruption was an important issue for their business. But, less than a third of these board-level respondents (32%) said they actually understood their anti-bribery policy, while only 12% felt they have undertaken enough anti-bribery training. Just 45% believe their approach to managing bribery and corruption is appropriate for their business.
Despite high-profile prosecutions under the UK Bribery Act and US Foreign Corrupt Practices Act, less than one in ten (9%) board-level executives see potential legal ramifications as the main reason why bribery and corruption issues are important to them, with a significant number instead saying the impact on their business is the most important consideration. Specifically, when asked why bribery and corruption were significant issues, 61% of respondents identified the potential impact on commercial success, 20% identified the potential reputational damage and a further 10% identified the strong ethical culture at their organisation.
Neill Blundell, partner and head of the fraud and investigations group at Eversheds LLP, said: "Ahead of this week’s government-led international anti-corruption summit – which seeks to galvanise a global response to tackle corruption – it’s clear that bribery remains a problem. Businesses do understand the seriousness of bribery and corruption and the potentially devastating impact of a public investigation on their bottom line and their reputation. This in itself represents significant progress. Until recently bribes were viewed by many as just the price of working in certain jurisdictions and sectors, but companies increasingly see bribery and corruption as being bad for business.
“However, the fact that less than one in ten see potential prosecution as the most important risk of bribery and corruption has profound implications for government’s anti-bribery strategies. Governments have typically tried to fight bribery by deterring companies with high profile prosecutions under the UK Bribery Act and similar overseas laws, but they need to work with the private sector to articulate the business case for anti-bribery."