The stories of corruption have become so common that it is almost always a part of the news. The companies face a lot of hardship in the aftermath of corruption allegations. Whether they are proved or remain unproven, the amount of bad press creates a great amount of damage to the business both internally as well as externally. Corporate Anti-Corruption Program is essential to keep your company from getting involved in shady dealings or doubtful conduct. Compliance has become a necessity due to stricter Global regulations surrounding corruption and any lapses are viewed seriously.
Corruption in the business can occur internally or through a third party involved in the business transactions. The 4 important programs to ensure your business is compliant are :
1.Due diligence in contract provisions
Companies face the risk of civil and criminal liability for offenses related to corruption committed on their behalf by third-party contractors. Internal control and policies can control corruption within the company but the control over third parties is not to a level of being effective and they are the major risk factor. The approach should be risk-based and due diligence is important while engaging third parties (vendors, resellers, suppliers, joint ventures, consultants, agents, etc.) A heightened level of scrutiny is essential before selecting the third party.
2.Procedures must be proportional
The policies and procedures of your company must be in proportion to the nature, size, and complexity of your business activities. A clear policy and detailed procedures to work responsibly to be complaint are necessary. Documentation practices, internal controls, auditing and disciplinary procedures should be strictly implemented under your Corporate Anti-Corruption Program.
Corporate legal departments must conduct a thorough internal risk assessment and create the awareness and mandatory requirements for compliance. The risk assessment should also be conducted considering the Geographic location, industry and other risk factors of the third parties. The third parties must be well appraised and should be following your company standards.
A detailed contract agreement and code of conduct should be given to them and they should be made well aware of the fact that they are contractually bound to follow the standards when acting on your behalf and responsible for the actions.
Furthermore, monitor them continuously should the third parties profile change and cannot be taken for granted.
The effective compliance program should not be just on paper, enforcement through auditing and proper records of compliance activities. The importance of this will be realized when an anti-corruption investigation starts. The company could face severe action if they are unable to prove their compliance. The collateral damages like loss of license, debarment, extradition, raids, loss of contracts, etc.
With a strict and visible commitment from the top level and implementing the 4 essential practices explained above in your Corporate Anti-Corruption Program can help your business conduct its activities all over the world, ensuring that your company is shielded from allegations of corruption within your third party network.