Multinationals fail to prioritise anti-bribery and corruption

Many multinationals are not treating anti-bribery and corruption as one of their main priorities, leaving them open to the potential risk of significant fines, criminal prosecution and personal liability, a new study by international law firm Hogan Lovells has found.

Based on interviews with 604 chief compliance officers (CCOs) and equivalent roles at more than 600 multinationals across Europe, the US and Asia, the study found 59% of respondents reported a culture of ‘profits over prevention’ and 44% said anti-bribery and corruption is not on the board agenda.

According to 57% of CCOs, sales pressure and incentives are one of the biggest challenges to reducing bribery and corruption risk. Other challenges include resistance due to compliance procedures conflicting with ‘getting the job done’, mentioned by 53% of respondents, while another 53% said anti-bribery and corruption is seen as ‘getting in the way’ of day-to-day operations.

The study found anti-bribery and corruption programs fall short in several critical areas, including tailoring guidelines to local markets, training staff and setting the right tone at the top.

Despite 60% of CCOs saying cultural differences cause a lack of support for anti-bribery and corruption, 28% of companies do not tailor their approach to different markets and 43% do not make anti-bribery and corruption guidelines available in local languages. Furthermore, 53% of companies have only trained half of their staff or less in anti-bribery and corruption.

At board level, 40% of CEOs do not consider anti-bribery and corruption a top priority and 39% do not openly support anti-bribery and corruption within their business.

Crispin Rapinet, global head of Investigations, White Collar and Fraud at Hogan Lovells, said: “The biggest challenge for multinational companies is to translate anti-bribery and corruption policies into effective guidance on the ground. Businesses need to make sure they are doing everything that is legally expected of them in all of the jurisdictions where they operate, to provide evidence that they help people decide what is acceptable and what constitutes bribery and corruption.”

He added compliance officers need to build the case for greater prioritisation of anti-bribery and corruption, identify the gaps in their own business and persuade their board to take the necessary steps to quickly increase their defence.

“Employees similarly need to understand how they make the decision between striving for greater profit and managing the bribery risks. This requires both training at a local level and a real belief that the senior management team is committed to an ethical approach. Most businesses are under pressure on costs – but there are some cost-effective steps that can be taken to mitigate this risk and provide a better defence should your business come under the scrutiny of a prosecutor.”