Globalisation has entered a new phase, posing greater challenges for anti-bribery and corruption (ABC) compliance than ever before.
Two factors are creating new issues for companies - first, a growing number of governments around the world are tightening ABC regulations or introducing new ones. Second, as companies globalise their operations, they rely more heavily on third-parties than before to do business in far-flung parts of the world, often in areas where there is a high risk of corruption.
These were the findings of a new report, “Anti-bribery and corruption: Rising to the challenge in the age of globalisation” by KPMG International. It also found that while companies are rising to the challenge of the stricter ABC regulations, a lot more needs to be done to create a sturdy ABC compliance structure.
Management of third-parties the biggest challenge
The problem is particularly acute in the management of third-parties who increasingly act as conduits for bribes, making it harder to track. Respondents to the survey admit it is the biggest challenge in the field of ABC, but they are not doing enough to develop a culture of compliance both among their employees and their vendors and other business associates.
Need to improve the way business is conducted
“Despite better controls and stronger ABC policies, companies continue to fail to comply with the tougher regulations, and are fined heavily as a result,” said Mr Jimmy Helm, Global Leader of Anti-Bribery & Corruption Services, KPMG. “Much has been said about ‘tone at the top’, yet we continually see failings at middle and lower management level, which leads one to conclude that there is not enough focus on ‘tone at the middle’. Companies can have a perfect ABC programme and yet continue to fall short, if they do not improve the way they do business.”
The survey was completed in October 2014 and targeted 659 respondents covering 64 countries, with 105 respondents from the Asia-Pacific region and represented a wide range of industries including banking, life sciences, manufacturing, and energy and natural resources.