More than half (59 per cent) of the senior executives involved in the research say their anti-bribery and corruption policies do not work effectively, despite anti-bribery laws now being prevalent across the world, with an increased focus by prosecutors to bring charges.

Contradictory picture

The findings of ‘Beneath the Surface’, which surveyed 500 executives from large companies located in 12 countries, paint a contradictory picture. 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.

Lack of training and understanding

Almost all of these board-level respondents (95 per cent) said bribery and corruption was an important issue for their business. But less than a third (32 per cent) said they actually understood their anti-bribery policy and only 12 per cent felt they have undertaken enough anti-bribery training. Furthermore, just 45 per cent believe their approach to managing bribery and corruption is appropriate for their business.

Impact on commercial success

Despite high-profile prosecutions under the UK Bribery Act and US Foreign Corrupt Practices Act, less than one in ten (9 per cent) of 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 per cent of respondents identified the potential impact on commercial success, 20 per cent identified the potential reputational damage and a further 10 per cent identified the strong ethical culture at their organisation.

Clash between ethics and commercial objectives

The findings also highlight an apparent clash between an organisation’s ethical intentions and its commercial objectives when it comes to addressing bribery and corruption. Nearly 90 per cent of senior executives said their anti-bribery policy made it more difficult to build their business, while almost one in five (19 per cent) are worried employees would resort to bribery or corruption when faced with challenging growth targets. A worrying 33 per cent admit their business does not conduct specific anti-bribery due diligence as part of M&A activity.  

Self-reporting

Of the 80 per cent that identified bribery or corruption in their organisation, 51 per cent took the decision to self-report to law enforcement agencies and 32 per cent informed the regulator. However, there are substantive differences between jurisdictions. Almost three quarters (72 per cent) of those respondents in China said they had informed law enforcement agencies, while 43 per cent did the same in the UK and just 26 per cent in Brazil. This could be explained by an apparent lack of knowledge regarding self-reporting regimes around the world. Less than a third (32 per cent) of respondents could identify any jurisdiction that rewards companies for voluntary disclosure.

Despite the need for greater understanding, respondents revealed a willingness to self-report, with almost all (99 per cent) stating they would self-report to law enforcement or regulators if they discovered bribery or corruption in their organisation tomorrow.

The response is what matters

Neill Blundell, partner and head of the fraud and investigations group at Eversheds, said: ‘The reality is that corrupt business practices will always occur, particularly in high risk jurisdictions. What matters is the way an organisation responds and how prepared it is to effectively mitigate the risk it poses to their business.’

‘Beneath the Surface’ is based upon data from 500 board-level executives in large organisations across 12 countries including the UK, Italy, Brazil, Hong Kong and China. The contributing companies spanned a range of sectors such as finance, health care and education.