Facing Down Bribery and Corruption Risk

Bribery and corruption risks are on the upswing for many companies, but policies to combat the risks are not particularly effective.

For the treasury and finance functions of companies that do business around the world, bribery and corruption are a serious concern.

In an Ernst & Young study released last month, 57 percent of respondents in the developing world said that bribery and/or corruption is widespread in their country. Another survey, conducted by Kroll Advisory Solutions and Compliance Week, provides further support for the idea that these risks are growing—and suggests that companies’ efforts to battle bribery and corruption are not extremely effective.

To mitigate their bribery and corruption risks, the vast majority of companies perform due diligence on their business partners—87.3 percent in the Kroll/Compliance Week survey. Among large companies, due diligence frequently involves dedicated investigations of prospective business partners, as well as having their local business units collect information on the prospects and having corporate legal, accounting, and/or finance departments conduct third-party reviews. Within smaller companies, due diligence generally focuses more on self-reporting by prospective business partners and obtaining references from trusted sources or U.S. government agencies.

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