Firms Need Board-level Commitment to Navigate the Bribery Act, Finds Survey
A survey by Thomson Reuters has revealed that although the majority of UK firms are on track to meet the implementation deadline for the Bribery Act, many feel that they have not adequately prepared their most senior executives and board members for the challenges they face from the new legislation.
More than 400 senior compliance officers, risk managers, internal auditors, lawyers and company secretaries affected by the new legislation responded to the survey. Among its findings, the survey shows that 39% of responding businesses felt they needed more preparation before the Act comes into force on 1 July 2011. However, overall, two-thirds are confident that any disruptions caused by new procedures will not impact their bottom line.
Stacey English, head of regulatory intelligence at Thomson Reuters Governance, Risk and Compliance (GRC), said a majority of companies believe that their implementation will be cost-neutral, removing a major concern. “This seems reasonable, given that implementation of the Act should simply be an extension of existing procedures and controls,” said English. “However, there is no room for complacency and many firms still have a lot of work to do.”
One of the biggest concerns highlighted by the survey is a lack of awareness at the board level over the impact of the Act.
The Ministry of Justice provides six essential principles for companies to follow in order to ensure compliance with the Act, one of which is the need for top-level commitment. Yet, the survey showed one in six (16%) companies questioned admitted they’d had no discussions with the board about the new anti-corruption legislation and 25% had only discussed it once. Notably, only one in three firms with an overseas parent board had thought it necessary to discuss the new rules with its board members.
“Complete board involvement is vital no matter where that board is based,” said English. “Regulators and law enforcement agencies will be looking to the board for leadership under the new Act. Board members need to set the tone for behaviour in this new environment. That’s what the law is asking for, and what regulators will expect.”
The survey also found one in five businesses in the UK say they feel totally unprepared for the challenges they face from the new Bribery Act, and suggests many companies are unsure how to plan for changes in the way they do business under the new law.
Seventy-five percent of companies needed to change existing policies or implement new ones to ensure their business practices comply with the new rules. But, the poll also revealed only one in 10 of the respondents had allocated extra budget and resources to do this.
According to English, the Ministry of Justice also is placing a premium on training and communication.
“There is a responsibility placed on a company to inform not only their staff but the employees of any third-party service providers it uses. Everyone involved in business dealings needs to be aware of the firm’s anti-bribery policies and stance with the Bribery Act,” said English. “The survey suggests this is not happening yet. This Act is designed to have the maximum deterrent effect, and companies need to realise how wide reaching its powers are. The Serious Fraud Office intends to enforce this Act not only in the UK but internationally.”