The Compliance Gap — A Reality Check
With all the hoopla these days about the FCPA, UK Bribery Act and other anti-corruption law enforcement, you would expect that every company has initiated some compliance actions. With guidance provided by Justice Department filings and settlements, the U.S. Sentencing Guidelines, the OECD, and the UK Ministry of Justice, companies have certainly available resources to assist them in the compliance arena.
A 2011 KPMG survey, however, paints a very interesting picture. KPMG conducted a survey of business leaders on anti-corruption issues.
According to the survey respondents, despite the known compliance risks of working with third parties in some countries, the survey found:
• Two in five U.S. and U.K. organizations with written anti-bribery and corruption policies do not distribute them to agents, distributors, vendors, brokers, joint-venture partners or suppliers.
• Three in five companies with such compliance programs that incorporate employee training do not require any third-party representatives to participate in the training.
• Nearly one in three U.S. and one in four U.K. companies require training less than once a year.
• Three in five companies do not exercise “right to audit clauses” in third party contracts.
• More than half of the U.S. and 10 percent of the U.K. companies do not obtain periodic compliance certifications from those with whom they do business in other countries.
The KPMG survey also pointed to significant shortcomings in how companies develop, implement and maintain anti-bribery and corruption policies:
• One in five respondents said their companies don’t have communication and training programs.
• One in two of the respondents’ organizations does not have a committee responsible for overseeing anti-bribery and corruption compliance.
• Three in four U.S. and three in five U.K. respondents said their organization does not have a full-time dedicated anti-bribery and corruption compliance officer.
• A third of the companies do not perform anti-bribery and corruption risk assessments.
These survey results are hard to believe given the current compliance atmosphere. But if they are accurate, companies need to step up their efforts.
Enforcement agencies need to consider appropriate incentives to spur compliance other then trumpeting enforcement and threats of enforcement to deter misconduct and encourage compliance.