Enterprise Risk Management (ERM) is becoming more ingrained in business strategy and day-to-day practice, with the mitigation of risks now fundamental to the success of any organisation. Bribery is a major risk that has the capacity to ruin a company’s reputation and cost it dearly, not only in financial terms.
Cases of bribery and corruption have been hitting the mainstream news headlines and involving everything from high-profile sporting organisations and personalities to major companies. Cases often result in record fines as well as severe reputational damage to the public image of household brand names.
Paul Hopkin, technical director at the Institute of Risk Management (IRM), stated: “Bribery can take many forms. In popular culture, it’s often seen as something of a ‘dark art’, with special agents switching briefcases and ‘fat cats’ lining their own pockets. In a good many cases, though, bribery is more ‘under the radar’ and can involve staff at both the grassroots and Boardroom levels.”
Hopkin continued: “The new guide is intended to help anyone involved in managing risk identify and evaluate their exposures to the risk of bribery. It also explains how risk assessment fits into the development and maintenance of an organisation’s wider anti-bribery programme.”
Peter van Veen, director of the Business Integrity Programme at Transparency International UK, added: “We’re delighted to collaborate with the IRM on this new guide. It represents an important addition to the toolkit of anyone involved in managing risk, and we hope that it will help risk professionals and their colleagues alike in strengthening their approach towards mitigating bribery risk.”
He concluded: “Companies have an important role to play in the fight against corruption, not only by ensuring that they’re not knowingly or unknowingly reinforcing local corruption by paying bribes, but also by showing leadership in their industry through setting and then operating to high standards.”
Bribery and corruption: stains on society
A recent comment by a senior UK politician that certain countries are more renowned for bribery than others sparked a debate about how widespread bribery really is, both in geographical/cultural terms and in terms of its nature. Bribery demands may be more prevalent in some parts of the world than others, but those willing to pay bribes to win business and access new markets can be found pretty much everywhere.
At one time, bribery was understood as simply another cost of doing business. However, the world is changing and bribery and corruption are increasingly being seen for what they are: stains on society and a financial burden on ordinary citizens that disproportionately affect the poorest people.
Boards must be aware of the risk of bribery to their organisations and the legal and financial repercussions. This new guide aims to define the scope of bribery risk, dispel some of the myths surrounding bribery and give practical advice and tools to help an organisation assess bribery risk, design necessary controls and educate staff accordingly.
*Copies of the free guide can be downloaded here
**The IRM will be holding a joint Workshop with Transparency International UK on the implications and practical uses of the Bribery Risk Guide. This is taking place at Lloyd’s Register, London on Thursday 20 October. For more information visit https://www.theirm.org/events/bribery-risk-workshop.aspx (the cost to IRM members is £55 and for non-members £85)