UK Bribery Act

Meeting and Exceeding the Act’s Requirements

Companies charged with the offence of failing to prevent bribery will have a defence to that charge if they have adopted “adequate procedures” designed to prevent bribery. Organisations should recognise that establishing adequate procedures means more than just setting rules and enforcing them. It means establishing the right culture. We offer guidance on critical factors to consider, and pitfalls to avoid.

1. Have you thoroughly assessed your risks?

Assessing bribery risks, and ethics and compliance risks more generally, should become a regular part of general business planning. Periodic risk assessments should be carried out to ensure appropriate policies and procedures are in place to identify and guard against bribery risk. Risk assessments will focus on many factors, including operating territories, organisation structure, financial controls, and use of intermediaries.

Common Pitfall

In our experience too many firms fail to perform a systematic assessment of bribery risks, or they perform them in a siloed function that is unconnected to an assessment of the firm’s overall business risks and general business planning. Effective risk assessment involves gaining a deep understanding of an organisation, including its management and organisational structures and business processes.

LRN can help

Our Risk Assessment and Management solution (RA+M) provides a best practice methodology, overview and reporting tool to identify, assess and manage your bribery, ethics and compliance risks.

2. Do you have a Code of Conduct and effective procedures in place?

The foundation of any ethics and compliance programme is a set of policies to guide conduct. Effective policies do not simply state a set of rules; they also relate a set of values that engage employees in the enterprise. Moreover, policies should move beyond high level concepts of “paying no bribes”, and include specific guidance for difficult situations aligned with the firm’s risks, such as entertaining and gift giving, and dealing with customs officials.

Common Pitfall

Often companies write policies whose purpose is to explain rules and procedures to employees in complex legal language. In order for policies and procedures to be clear, practical and accessible, they must be presented in an easily understandable format with guidelines and examples of typical dilemmas which are relevant to the business.

LRN can help

We apply more than 10 years experience helping leading global companies develop and use values-based Codes to inspire their workforces and reinforce principled behaviour. Our Code of Conduct course is the cornerstone of many ethics and compliance programmes, and the model is based on the best practices we’ve identified from creating hundreds of custom-made code courses, providing our client Partners with a cost-effective alternative to individual course development.

3. Do you have top level commitment?

There must be a commitment from leadership at all levels, communicated regularly through word and deed, to doing business ethically and not just complying with the law to avoid problems.

Common Pitfall

Companies often fail to reinforce commitment to ethical conduct through meaningful and regular communication from leadership, as well as action beyond ‘ticking the boxes’ of what needs to be seen to be done. This includes organisational structures and responsibilities for ethics and compliance that go all the way to the top, and allocation of adequate resources to run a programme effectively.

LRN can help

LRN founder and CEO Dov Seidman and our chief leadership team regularly speak at Board sessions, leadership retreats, and events for high performing managers on the concept of inspirational leadership as articulated in the best-selling book, How: Why How We Do Anything Means Everything...in Business (and in Life). Engagement themes include Winning in the Marketplace: Culture as a Strategy, Inspirational Leadership, Ethics and Compliance as a Strategic Business Partner, and Redefining Sustainability.

4. Having completed your due diligence on your agents and others who provide services to your business, how will you reinforce your corporate values and culture?

Companies must ensure they have effective procedures to ensure that agents, advisers, and other parties that provide services to the business (“Associated Persons”) do not pay bribes on their behalf. These must include processes for gathering background information and reputation before they are hired. All agents should work under a written contract that includes appropriate anti-bribery language, and the firm should educate agents about their responsibilities, and the firm’s expectations, in this area.

Common Pitfall

Many companies who are charged with overseas bribery offences have failed to impose effective education for agents and other service providers. Effective due diligence is a business critical investment, so it is important that it is followed up with effective communications and education.

LRN can help

We publish more than 1,000 online training and education modules a year, and the LRN library has the broadest and deepest topic coverage in the industry. Our courses, including the modules relevant to the Act, focus on the common principles and best behaviours that empower team members to stay out of trouble and protect their clients.

5. Have you launched an internal communications programme and ensured all your staff have had the correct level of education and training?

Policies are useless if they are not communicated or understood. Education and endorsement from managers are key. Effective education cannot merely be a recitation of these rules, but must be stimulating, engaging, and filled with relevant examples. There should be clear accountability for compliance, and senior managers should create a non-threatening environment so that employees can bring suspected breaches to their attention.

Common Pitfall

It is important that employees receive training regarding bribery risks, but in our experience this is often not sufficient. Education must take the form of a training course specifically tailored for the audience, preferably in person to allow for discussion and direct feedback on difficult issues.

LRN can help

LRN learning solutions engage employees by presenting ethical scenarios in a variety of formats including movie quality video that can be launched as stand-alone experiences or integrated into a multiphase learning progression. E-Learning provides engaging courses covering legal and ethical risks specific to geographical regions and industries.

6. Do you have an ongoing mechanism to monitor and review your performance?

Mechanisms to monitor conduct and controls and detect wrongdoing are essential. This means reliable and effective auditing and a clear process for investigating and responding to possible  wrongdoing. In addition, compensation systems should recognise ethical business conduct and principled performance as well as sales and financial results.

Common Pitfall

All too often, controls to prevent bribery are stated well but implemented poorly because there are ineffective  financial and other controls and few, if any, immediate consequences for failure to follow them.

LRN can help

To help ensure the continuing effectiveness of your anti-corruption efforts, LRN offers ongoing consultation with our anti-corruption experts. Our Helpline solution offers confidential and anonymous employee reporting of potential issues, via telephone and web, to ensure that all allegations can be investigated by our clients’ management and appropriate actions taken. Our Case Management solution automates the allegation lifecycle from report, through investigation and testimony.