Bribery Act: One-Off Training versus a Three-Year Programme
Companies today are faced with a rapidly developing legislative landscape –
not only in terms of the amount of legislation, such as the new Bribery Act, but also the preparedness of the authorities to pursue investigations and prosecutions.
Not convinced? Well, take a look at recent developments with Siemens. Following a major investigation into bribery, Siemens paid $1.34 billion in fines in December 2008 as part of a process that would eventually cost them $2.5 billion in fines, fees and other costs. Siemens put in place a 600-strong compliance team and hoped - expected - that it would draw a line under the issue.
However, in June 2011, a call to their Whistleblower hotline uncovered bribery in the Siemens Kuwait unit. Worse was to come in December 2011 when the US Securities and Exchange Commission (SEC) charged eight former Siemens executives under the Foreign Corrupt Practices Act, in a signal of its growing intent to bring individuals to justice, not just hand out fines to companies.
Whilst the charges relate to alleged government bribery in Argentina, it is a much wider indication of the SEC’s determination not to just let the issue drop, as had been expected.
The Siemens case is just one example of why companies today need to have an effective ‘Corporate Shield’ - and, clearly, that shield will not be effective if it has its roots in an hour’s one-off tuition.
Many companies say they want a Bribery Act ‘package’ so that they can quickly and easily discharge their responsibilities under the Act - a ‘tick in the box’ approach. But the Bribery Act - with its Adequate Procedures and Associated Persons - was written such that there isn’t a ‘one size fits all’ - and companies really have to understand their risks if they are to discharge both the spirit and letter of the Act.
Almost to the day - 1st July 2011 - that the Bribery Act became law, the UK’s Office of Fair Trading issued new guidance on the Competition Act. Irrespective of whether the timing was by accident or design, the new guidance means that companies need to be aware of how they are impacted by Competition Law - whilst also dealing with the new rigours of the Bribery Act.
What does all this mean? It means that organisations have to implement an effective compliance and ethics programme which covers the full range of their activities, people, locations and risks. It doesn’t mean - as an extreme - that the cleaning staff have to be trained every six months on bribery; it does mean, though, that a risk assessment has to be undertaken - and training, education and communications then focused on senior managers and those in high risk roles and locations.
Do that and an effective ‘Corporate Shield’ becomes a reality, and a critical corporate asset. It sends a powerful message to Regulators if a company has a training achievement of 95% on a structured, effective and ongoing training programme; it is also a powerful reputational statement when bidding for that next major contract.
not only in terms of the amount of legislation, such as the new Bribery Act, but also the preparedness of the authorities to pursue investigations and prosecutions.Not convinced? Well, take a look at recent developments with Siemens. Following a major investigation into bribery, Siemens paid $1.34 billion in fines in December 2008 as part of a process that would eventually cost them $2.5 billion in fines, fees and other costs. Siemens put in place a 600-strong compliance team and hoped - expected - that it would draw a line under the issue.
However, in June 2011, a call to their Whistleblower hotline uncovered bribery in the Siemens Kuwait unit. Worse was to come in December 2011 when the US Securities and Exchange Commission (SEC) charged eight former Siemens executives under the Foreign Corrupt Practices Act, in a signal of its growing intent to bring individuals to justice, not just hand out fines to companies.
Whilst the charges relate to alleged government bribery in Argentina, it is a much wider indication of the SEC’s determination not to just let the issue drop, as had been expected.
The Siemens case is just one example of why companies today need to have an effective ‘Corporate Shield’ - and, clearly, that shield will not be effective if it has its roots in an hour’s one-off tuition.
Many companies say they want a Bribery Act ‘package’ so that they can quickly and easily discharge their responsibilities under the Act - a ‘tick in the box’ approach. But the Bribery Act - with its Adequate Procedures and Associated Persons - was written such that there isn’t a ‘one size fits all’ - and companies really have to understand their risks if they are to discharge both the spirit and letter of the Act.
Almost to the day - 1st July 2011 - that the Bribery Act became law, the UK’s Office of Fair Trading issued new guidance on the Competition Act. Irrespective of whether the timing was by accident or design, the new guidance means that companies need to be aware of how they are impacted by Competition Law - whilst also dealing with the new rigours of the Bribery Act.
What does all this mean? It means that organisations have to implement an effective compliance and ethics programme which covers the full range of their activities, people, locations and risks. It doesn’t mean - as an extreme - that the cleaning staff have to be trained every six months on bribery; it does mean, though, that a risk assessment has to be undertaken - and training, education and communications then focused on senior managers and those in high risk roles and locations.
Do that and an effective ‘Corporate Shield’ becomes a reality, and a critical corporate asset. It sends a powerful message to Regulators if a company has a training achievement of 95% on a structured, effective and ongoing training programme; it is also a powerful reputational statement when bidding for that next major contract.
