A recent report suggested more than one third of risk and compliance professionals expect their organization’s bribery and corruption risk to increase in 2017, while reputational risk associated with bribery and corruption allegations has also become a main concern for these professionals.
More than one third of risk and compliance professionals expect their organization’s bribery and corruption risk to increase in 2017, while reputational risk associated with bribery and corruption allegations has also become a main concern for these professionals.
The figures were from the 2017 Anti-Bribery and Corruption Benchmarking (ABC) Report released jointly by Kroll and the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices. The theme of this year’s survey was “Beyond Regulatory Enforcement: The Rise of Reputational Risk.”
According to the report, against a backdrop of heightened regulatory and reputational concerns, more than one-third (35 percent) of all risk and compliance professionals surveyed expect their organization’s bribery and corruption risks to increase in 2017, and more than half (57 percent) expect them to persist at the same levels as last year.
Respondents believe the top risks to their anti-bribery and corruption programs will come from third party violations (40 percent), a complex global regulatory environment (14 percent), and employees making improper payments (12 percent), according to the report.
The report further cited the reputational risk associated with bribery and corruption allegations is also on the minds of most respondents. General reputational concerns went from being the least likely reason identified in last year's ABC Report for a third party to fail a company’s vetting standards to being the most likely reason — a “stunning” change in just one year.
“It is clear the anti-bribery and corruption program can be viewed in the context of regulation, as well as more broadly as a means of protecting an organization’s most valuable asset — its reputation,” said Steven Bock, Managing Director and Head of Operations and Research with Kroll’s Compliance practice.
Separately, the survey suggests senior leadership’s engagement regarding anti-bribery and corruption efforts is on the rise. According to the numbers, 51 percent of respondents state senior leadership at their organization is “highly engaged” with anti-bribery and corruption efforts, a 4 percent increase over the previous year.
“All research points toward a clear link between ethics and performance, and with more involvement from leadership, we are seeing that anti-bribery and corruption efforts are being prioritized,” added Erica Salmon Byrne EVP & Executive Director of Business Ethics Leadership Alliance, Ethisphere. “Smart companies with strong compliance programs are taking note and adjusting their priorities accordingly in order to mitigate unnecessary risk and protect their company’s valuable reputation for integrity.”
The ABC Report also includes the following findings:
- 49% of respondents showed concern that they did not have enough resources to support anti-corruption efforts.
- One-third of respondents reported having a greater level of concern about personal liability than the prior year.
- 26% of respondents said issues that were identified at the time of third party onboarding were not adequately addressed.
- 67% of respondents reported engaging in M&A in 2016, but conducted lesser levels of due diligence on targets or targets’ third parties than expected.
- 37% of CFOs maintain an active role in developing their organization’s anti-bribery and corruption programs.