Higher levels of cross-jurisdictional cooperation and an increase in whistleblower activity have contributed to significant growth in the scope and size of Anti-Bribery and Corruption (ABC) enforcements in recent years. In 2019, we saw two of the biggest FCPA actions of all time, and the average settlement was $207 million.1 As businesses face stronger levels of scrutiny and more cooperation between global regulatory and enforcement regimes, the imperative for avoiding an enforcement is stronger than ever. The consequences for failing to prevent bribery and corruption across relationships with customers, vendors and other third parties can create a long-term threat to business sustainability.
While some businesses worry about the cost of implementing a strong Anti-Bribery and Corruption due diligence program, risk intelligence and analytic solutions can help any business proactively strengthen compliance and automate workflows. This allows them to focus on core business objectives, as can a strong message from the top of an organization that compliance matters.
Prioritize ABC and primary business objectives
Determining the right level of ABC prevention efforts can be complicated. By doing too little, you expose the business to severe risk, while excessive efforts divert capital and resources away from your primary objectives. It is imperative that businesses of all sizes use cost-effective, relevant and robust global risk intelligence and tools that support a comprehensive third-party due diligence program. Such a program should be tailored to a company’s specific ABC policies to automate key workflows, increase supply chain visibility and minimize delays caused by remediating false positives, among other efficiencies. Of course, due diligence is only as effective as the data sources used to perform it, so a thorough evaluation of those sources is necessary as well.
Accelerate risk assessment with relevant screening intelligence
The efficiency of a business’s ABC workflow depends on access to information that supports confident, well-informed decisions—without the delays of false positives and labor-intensive follow ups and investigations. Risk intelligence and analytics employed to automate screenings of customers, vendors and third-party suppliers results in a consolidated ABC risk due diligence process helping to quickly identify potential risk. By quickly accessing relevant, accurate information, making informed decisions and recording the outcomes of decisions for future audits, businesses can be primed to stay on the right side of the regulators and save on human labor costs.
In a recent LexisNexis® Risk Solutions study, 69% of financial services industry respondents revealed that they are “somewhat to very concerned” about the job satisfaction of their compliance staff.2 In the U.S., that dissatisfaction leads to an average of 26 hours of lost productivity for full-time equivalent compliance analysts, per year.3 Throwing more labor at compliance initiatives is not the answer. Technology, however, can augment human decisions and free up highly-skilled members to focus on higher-value activities and more complex compliance decisions.
Getting top level buy-in
You have heard this many times, but when establishing and maintaining any corporate program in any industry, the most important factor is top-level commitment. If leadership is committed fully and visibly to an ABC-compliant corporate culture, then the culture trickles down to the rest of the organization. If the leadership of a business is seen to be accepting unnecessarily lavish gifts, travel and hospitality, or are observed giving these to others, how could any company expect the staff to adhere to a compliance policy?
Management support is one of the Six Principles of the UK Bribery Act, which handily forms a good guide for almost any ABC compliance policy: top-level commitment; communication; proportionality; risk assessment; monitoring and review; and, crucially, due diligence. The latter is vital for ensuring that the supply chain and business partners live the same values as you do.
If a company has strong compliance procedures, then another element of the due diligence principle is external communication. Letting suppliers, peers, competitors, and consumers know about a company’s commitment to compliance has real benefits. With third parties, a stronger due diligence process leads to better business partners and partner relationships through improved knowledge. For consumers, knowing that a company has strong ethical and compliance values can inform choice and drive positive spending behavior. This all stems from the support of top management and permeates the entire organization.
Attempting to defend a business against bribery and corruption risk without a strong ABC strategy is an expensive, time and resource-consuming endeavor that erodes profitability. Implementing the right solutions – designed to help businesses tackle pressing ABC challenges without taking focus away from critical objectives – is imperative. Focusing on increased due diligence efficiency and improved supply chain visibility can help prevent ABC risk exposure, promote confident risk decisions and protect core business operations.
For more information, call 1-800-953-2877 or visit risk.lexisnexis.com/ABC
2, 3. LexisNexis Risk Solutions 2019 True Cost of AML Compliance Study