Tag Archives: compliance program

Guest Post: Compliance Culture in Emerging Markets — Tone at the Top or Tone in the Middle?

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Today’s guest post is from Gönenç Gürkaynak, the managing partner and head of the Regulatory and Compliance Department at ELIG, Attorneys-at-Law, a leading law firm in Istanbul:

When listing the fundamental pillars of a compliance program, guidance on the Foreign Corrupt Practices Act and UK Bribery Act both stress the importance of the top-level commitment — “tone at the top” — for creating and maintaining a compliance culture within the company. Because the actions and stances of the board of directors and senior executives reflect and shape the corporate compliance culture, these directors and managers are expected to fulfill leadership roles within scope of the compliance program of the company. But the compliance leadership of the top-level management can be undermined by the reckless actions of the mid-level managers who have the obligation to meet operational targets and deal with the various problems posed in the field. Accordingly, a tone from the top is not enough to create or sustain a compliance program — especially in emerging markets — unless such tone is supplemented by the voice of the mid-level management (“tone in the middle”). Continue reading →

Curbing Corrpution in Papua New Guinea: What Australia Can do

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A lively discussion is underway on the Development Policy Centre‘s DevPolicy Blog about what Australia can do to help control corruption in Papua New Guinea, the largest recipient of Australian foreign assistance.   It follows a government promise that by July 2015 the government will “detail the measures we [Australia] will adopt to protect Australian Government aid funds and how [Australia] will support our partner country’s anti-corruption efforts.”  What’s made the discussion so lively, as Grant Walton and Stephen Howes explain in the initial post, is the juxtaposition of Foreign Minister Julie Bishop’s recent discussion of the government’s plans to implement the policy with PNG Prime Minister Peter O’Neill’s evasion of arrest for his alleged role in a major corruption scandal and his attempts to dismantle PNG’s anti-corruption taskforce. Continue reading →

More on Compliance Certification–A Response to TRACE International

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In a recent post, which built directly on a report from Transparency International USA, I raised some questions about the value of the compliance program “certifications” that certain private firms offer to provide.  (In a follow-up post, I also expressed even greater skepticism about current efforts to generate an International Organization for Standards (ISO) anti-bribery compliance program standard.) I won’t repeat everything in the original post here, but to summarize quickly: I expressed concern that “certifying” a compliance program (as distinct from reviewing and assessing it) could prove counterproductive because (1) the certification would not (or should not) be treated as significant by government enforcers or third parties, and (2) the certification might lead companies either to do too little or too much.

TRACE, one of the leading firms that offers compliance certification services (and also, through a separate but affiliated nonprofit, provides anti-bribery compliance support to member companies), has provided a thoughtful, thorough, and enlightening response to my post on the TRACE blog. The TRACE post takes issue with my criticisms, and also uses my post as an opportunity to “address head-on some common assumptions and misunderstandings that … surround anti-bribery certifications.”

I highly recommend that readers interested in this debate — which TI-USA deserves credit for kicking off — read TRACE’s post; I won’t try to summarize it here.  Let me say a few words about where I think we actually agree, then highlight what I think are the most significant points of disagreement, and then highlight one particularly intriguing aspect of the TRACE post that may deserve more extensive consideration. Continue reading →

Guest Post: Compliance, No Science

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Liz David-Barrett, the Director of the Oxford Centre for the Study of Corruption and Transparency, contributes the following guest post:

More and more countries are introducing and enforcing anti-bribery laws these days, as governments implement their commitments under the OECD Anti-Bribery Convention and the UN Convention Against Corruption.  By making companies liable for prosecution if they pay bribes to foreign public officials, the drafters hope to persuade companies to stop paying bribes and take measures to ensure that no bribes are paid on their behalf.  But do they work?   What do companies do when faced with a new anti-bribery law?

The United Kingdom since the introduction of the Bribery Act is a good laboratory for researching this question.  Passed in 2010, the Act came into effect only in July 2011.  But companies had ample time to prepare, given the prolonged hype as the Bill was debated in parliament. Some companies were — and still are — in denial, perhaps because they think they are not at risk, or the chances of being caught are slim. At the other end of the spectrum, some companies concluded that the Bribery Act created such serious legal risks that they opted to withdraw from certain high-risk markets entirely. But the vast majority of companies have responded to the Bribery Act by introducing or reforming their anti-bribery policies — that is, by amping up their corporate compliance programs.  So what have we learned so far from research on UK firms’ anti-bribery compliance programs? Continue reading →

A Greater Role for HR and Ethics Screening in Corporate Anticorruption Compliance?

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In my last post, I discussed recent research suggesting that combating corruption in government bureaucracies requires attention to the selection of personnel – trying to recruit not only the most capable, but also the most honest.  Might the general principle apply to private corporations?  Should corporate compliance programs place more emphasis than they do on assessing candidates’ integrity at the selection stage (initial hiring or subsequent promotion)?  And should law enforcement consider a firm’s efforts at integrity screening when assessing the adequacy of a firm’s compliance program?  I don’t have the answers to these questions – I simply don’t know enough about human resource management issues – but I want to raise them in the hopes of starting a discussion of the issue.

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Guest Post: The Alibaba IPO–Open Sesame Time for Anticorruption?

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Dieter Zinnbauer, Senior Program Manager for Emerging Policy Issues at Transparency International, contributes the following guest post on the pending Alibaba IPO:

The anticipated listing of Alibaba, China’s rising corporate tech star, on a U.S. stock exchange is likely to be the IPO of the year. The business press is awash in speculations about the financial and economic impact of this much hyped IPO. Will this listing also create a big splash in the fight against corruption? What will be the impact on business integrity when this fast-growing Chinese tech company lists in the US and, as a result, directly subjects itself to the Foreign Corrupt Practices Act (FCPA) and other corporate governance rules?

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