‘Cry of anger’ over bribery echoed by businesses, anti-corruption expert tells GR

John Bray, Control Risks

As director of analysis at global risk and strategic consulting firm Control Risks, John Bray is not easily shocked. But even he was disturbed by some of the findings of a Control Risks survey of general counsels, senior corporate lawyers and compliance heads in more than 300 companies around the world.

Bray said that it was clear from the results of the 2013 International Business Attitudes to Corruption survey that many organisations were falling well short of best practice in their anti-corruption compliance programmes. “The compliance cup is only half full, and very few companies seem to be doing what we would regard as proper training,” he told GR. “The compliance train is moving slower than we might expect.

“This applies even to what we would think of as the elementary requirement to have a well drafted policy statement. Many companies do have anti-bribery policy statements, but there is a very significant number that don’t.”

Bray, who specialises in formulating anti-corruption strategies for companies and government agencies, said that another striking finding of the survey was in the area of operational bribes. “When we gave company lawyers a list of five headaches and asked them what their two biggest headaches were, the one at the top of the list was ‘demand for bribes to get things done and keep your operation running’, and that does fit in with our consultancy experience,” he said. “At first sight, it’s counter-intuitive because big enforcement actions are about big bribes to pay business. That’s appropriate, but it’s not the whole story. Getting things done is the other part of the story.”

Indeed, the report states that resisting demands for small bribes required businesses to show a combination of concerted top-level leadership and day-to-day ground-level determination and ingenuity. “This is likely to be a major challenge for years to come and, as such, it is right that it should rank so high on the corporate agenda,” it concludes.

Bray said that Control Risks’ international clients were most concerned with international enforcement. “So, in order of priority, the UK Foreign Corrupt Practices Act, UK Bribery Act and, a somewhat distant third, the Australian Criminal code and similar extraterritorial laws from other OECD countries,” he said. “We’re also saying to clients, don’t forget about domestic enforcement. Political risk assessment, monitoring and those types of things are all the more important in the light of enforcement actions.”

Another recent study conducted in this area is the Global Corruption Barometer 2013 report released by the civil-society organisation, Transparency International (TI). The survey of more than 110,000 respondents in 107 countries addresses people’s direct experiences with bribery and details their views on corruption in the main institutions in their countries. Bray said that in those countries in which households report trouble with bureaucrats, “businesses also tend to have hassles dealing with government services which are not as efficient as they ought to be”.

Bray said that while the TI survey focused on “the view from the household”, it could still be valuable to risk managers. “The corruption barometer is a cry of anger – in some countries a cry of pain – and some of those cries are echoed in business circles,” he said. “Firms should take note, but corruption risk assessments for individual companies need to be more specific and focused.”

Bray said that while it was striking that most of the respondents were pessimistic about corruption issues in their country, it was “not entirely a bad news story”.

“It means there has been more media coverage, and therefore people are more sensitised to the issue,” he said. “In the long run, that’s not such a bad thing, but it does reinforce the need for companies to be very clear that their own houses are in order.”