Updated: Aug 21, 2021
Good strategists manage uncertainty by playing the probabilities, but too many executives use wishful thinking when it comes to anti-corruption compliance.
Training Executives on Anti-Corruption Laws – Best Practices
Playing the probabilities means understanding the odds of success. Just 1 in 12 companies manages to mitigate reputation risk exposure resulting from non-compliance and which in turn results in a high level of reputation risk exposure.
Non-compliance seriously increases risk and liability, depreciates mergers and acquisitions, and joint venture value, potentially damages the brand, undermines and reduces trust and confidence, increases the potential for investigation and prosecution, and threatens sustainability. Executives must be pro-active and continuously diligent in their efforts to mitigate individual and organisational risks.
Corporate boards are due for a rude awakening – compliance expectations and competing stakeholders are demanding increased and more effective oversight. Directors, therefore, need to learn how to carry out these important functions.
When training executives on anti-corruption laws we need to make them realize that Boards and senior executives need to do substantially more than a once-a-year “flyover” of their anti-corruption compliance programs if they expect the regulators to conclude that their program meets the government’s definition of “effective.”
Boards need to be well-versed in all elements of the anti-corruption compliance program, regularly interact with compliance and legal personnel, and receive timely briefings on the program and the personnel responsible for its stewardship and operationalization. Directors and senior executives must understand that any compliance failures are something that they may have to answer to.
The existence of adequate policies and procedures does not provide a full defence against bribery charges but can be a useful tool for negotiating with authorities or avoiding proceedings against corporate entities. Further, because liability can also be founded on ‘wilful blindness’, the existence of anti-corruption policies and procedures can be helpful in rebutting any inference that a company or its executives ignored bribery. Bad acts can happen even if a company has attempted to prevent corruption, but its goodwill will be advantageous in curbing undeserved penalties.
There is still a place for tone at the top, but it needs to be broadened to conduct at the top. The board and senior leadership must set the right tone in their communications across the company and outwardly. But tone needs to be paired with persistent actions on the part of the board and senior leadership signalling that ethics and compliance are a top priority and that the company is committed to doing business the right way and is prepared to back up its words with actions, including walking away from business and relationships that are not in alignment with the company’s organizational ethos. That is how tone at the top becomes conduct at the top.
When training Boards and senior executives on anti-corruption laws, we also need to make them realize that they cannot control the integrity of individuals, but they can certainly influence it. An organization’s culture influences the integrity of those employees that are either on the fence or would rationalize wrongdoing when the culture promotes willful blindness, permits ignorance of policies and controls, or encourages the avoidance of those controls through unreasonable business goals and rewarding success by any means.
Anti corruption culture
Finally, Boards and senior executives need to be aware that no controls, compliance program, or business culture can eliminate or totally prevent people without integrity from doing wrong, but the absence of those factors greatly increases the capacity of wrongdoers to operate with impunity, while the strong presence of those factors greatly increases the likelihood of preventing and detecting wrongdoing, as well as providing a foundation to mitigate its impacts and consequences on the organization.