Companies react differently to a set of risks.  In response to the new FCPA enforcement push, some companies have continued with business as usual.  Others have stopped to assess their compliance program, assessed the risk and taken action to shore up their potential risks and exposures.

What is surprising is how many companies have chosen to ignore the problem and continue on with business as usual.  It reminds me of scenes from “The Deer Hunter,” when Christopher Walken played Russian roulette with the pistol with his Vietnamese counterparts.  Companies are just begging for problems.

A recent survey showed that 38 percent of companies questioned had made no changes, taken no action, and claimed to be unaware of increased anti-corruption risks.  It is amazing that in these times companies can ignore the risks. 

For example, a company with no anti-corruption compliance program other than a statement in its employee policy of its intent to comply with all laws is just begging for trouble.  The company does not train its employees, has limited financial controls, and makes no effort to address the risk of corruption.  The company also operates in several high risk areas.  Add to this mix the intense pressure on sales staff to increase sales in the new emerging markets.  The company is also a publicly traded company in the United States.

This is not an unheard of scenario.  It occurs all too often in the global marketplace.

Assume that at some point DOJ and the SEC find out about bribes being paid to government officials in the emerging market.  Is an FCPA enforcement action warranted?  Of course it is and those that support FCPA reforms cannot point to this example as one where FCPA enforcement is unfair to the business community.

The way to avoid this scenario is to take the time to review and re-design your compliance program.  It is an investment well worth making and too many companies act in a penny wise but pound foolish way.  Of course, we need to balance in any equation the risk of detection.  Sometimes companies are able to escape detection.  But one thing is clear that with new whistleblower incentives, an aggressive plaintiff’s trial bar tolling for shareholder derivative suits and increased global awareness of corruption issues, companies which choose to avoid the compliance route have only themselves to blame when an FCPA enforcement action is initiated.

Corporate governance principles are well established and it is here where the rubber meets the road.  The responsibility lies with the company’s board to address this issue.  The board has no one else to blame but itself if it fails to act and to do so promptly.