Bribery, Corruption & Supplier Risk Management Infographic

WHAT YOU CAN DO. Source: 1. http://www.ey.com/GL/en/Services/Assurance/Fraud-Investigation---Dispute-Services/Global-Fraud-Survey---a- place-for-integrity---Preparing-to-meet-new-challenges 2. http://www.shearman.com/Shearman--Sterling-Report-Examines-FCPA-Prosecutions-and-Penalties-Analyzes- Impact-of-New-DOJSEC-Guidance-12-28-2012/ 3. http://www.briberylibrary.com/compliance-programmes/deferred-prosecution-agreements-to-be-introduced-as- a-bill-in-the-next-parliament/ 4. http://www.briberylibrary.com/compliance-programmes/deferred-prosecution-agreements-to-be-introduced-as- a-bill-in-the-next-parliament/ Bribery, Corruption and Third Party Risks : Only 59% of respondents report using an approved supplier database. Factors that Magnify FCPA Risk 1 Factors that influence a prosecutor in a Deferred Prosecution Agreement decision 3 47% of CFOs When presented with a list of possibly questionable actions that may help the business survive, felt one or more could be justified in an economic downturn. surveyed would be willing to make cash payments to win or retain business and 4% view misstating a company's financial performance as justifiable to help a business survive. 15% of CFOs respondents agree that management is likely to cut corners to meet targets; CFOs have an even more pessimistic view (52%). 46% of total Seriousness of the offence History of similar misconduct Potential collateral damage of enforcement action Existence of an effective compliance program Extent of wrongdoing Full and timely disclosure of wrongdoing Remedial action taken Caused by a bad individual or bad culture Adequacy of civil or administrative actions $260 Million in fines levied for violating the FCPA/UK Bribery Act in 2012 2 Cost of Corruption DPA or NOT? Be aware of specific requests or actions that could suggest problems. Look for signs of change, and let the appropriate people know of changes in process, quality or ownership. Know our expectations of ethical conduct. What can you do to help? Review due diligence policies that apply to your relationships with third parties. (at 45%) FCPA violations form nearly half crime prosecuted by the DOJ 3 . of all economic

Upload
navex-global
Category

Business
view
1.263
download
6

Embed Size (px):

description

We communicate frequently about the ethics and compliance risks employees and managers face, and what can be done to reduce those risks. Most of our emphasis is on our own actions. However, some of the greatest risks we face are caused by the actions of those who are not company employees. Suppliers, agents, consultants and contract employees can all expose companies to risk. In the last few years, for example, the following has been alleged: - The recent horsemeat scandal in Europe occurred as a result of decisions made by suppliers. - A Mattel supplier changed subcontractors without Mattel’s knowledge. The new subcontractor changed a production process to use paint with lead in it. - Agents hired by a joint venture between a Halliburton subsidiary and a local company in Nigeria paid bribes. Halliburton faced penalties of more than $500M USD. - Allegations of child labor and poor working conditions have increased scrutiny on dozens of companies sourcing apparel and electronics in Asia. Examples don’t have to be so dramatic, either. Shoddy and shady practices of all kinds can come back and haunt us. One thing is clear: no one ever remembers the name of the supplier, agent or subcontractor who got the big-name company into trouble. It is always the big company—us—who is negatively identified with these events. What can you do about this? 1. First, of course, is to follow any review or due diligence policies that apply to your relationships with third parties. 2. Make sure the third parties you deal with are under contract, have been trained and otherwise know our expectations of ethical conduct. 3. Continue to exercise oversight toward our third parties. Know the third parties you work with. Look for signs of change, and let the appropriate people know if changes in process, quality, ownership or anything else raise questions in your mind. 4. Be aware of specific requests or actions that could suggest problems. For example, if you are asked for payment outside of normal channels, or if you sense nervousness or antagonism toward our auditing or quality processes, these could be red flags.

Transcript of Bribery, Corruption & Supplier Risk Management Infographic

Page 1: Bribery, Corruption & Supplier Risk Management Infographic

WHAT YOU CAN DO.

Source:

1. http://www.ey.com/GL/en/Services/Assurance/Fraud-Investigation---Dispute-Services/Global-Fraud-Survey---a- place-for-integrity---Preparing-to-meet-new-challenges 2. http://www.shearman.com/Shearman--Sterling-Report-Examines-FCPA-Prosecutions-and-Penalties-Analyzes- Impact-of-New-DOJSEC-Guidance-12-28-2012/ 3. http://www.briberylibrary.com/compliance-programmes/deferred-prosecution-agreements-to-be-introduced-as- a-bill-in-the-next-parliament/ 4. http://www.briberylibrary.com/compliance-programmes/deferred-prosecution-agreements-to-be-introduced-as- a-bill-in-the-next-parliament/

Bribery, Corruption and Third Party Risks:

Only 59%of respondents report using an approved supplier database.

Factors that Magnify FCPA Risk1

Factors that influence a prosecutor in a Deferred Prosecution Agreement decision3

47% of CFOs

When presented with a list of possibly questionable actions that may help the business survive,

felt one or more could be justified in an economic downturn.

surveyed would be willing to make cash payments to win or retain business and 4% view misstating a company's financial performance as justifiable to help a business survive.

15% of CFOsrespondents agree that management is likely to cut corners to meet targets; CFOs have an even more pessimistic view (52%).

46% of total

Seriousness of the offence

History of similar misconduct

Potential collateral damage of enforcement action

Existence of an effective compliance program

Extent of wrongdoing

Full and timely disclosure of wrongdoing

Remedial action taken

Caused by a bad individual or bad culture

Adequacy of civil or administrative actions

$260 Millionin fines levied for violating the FCPA/UK Bribery Act in 20122