Requiring business corporations to institute an anticorruption compliance program should be a part of any national strategy to fight corruption. The argument is simple. Corporate employees or their agents are always on the paying side of a bribery offense and often a facilitator of conflict of interest and other forms of corruption. Making it against company policy for employees or agents to participate in any corrupt act with stringent sanctions up to and including termination for a violation will help shut down the supply side of the corruption equation.
Even where a company’s compliance program is a sham, established simply to comply with the law, it can still help in combating corruption. A sham program would be a violation of law, and were the company investigated, the existence of a sham program would be easy for investigators to spot, easing their task of determining wrongdoing. So there seems to be no reason why lawmakers shouldn’t insist that firms subject to their law, whether state-owned or privately-held, establish a program. And between the many guides published by international organizations (examples here and here), NGOs (here and here), academics, the burgeoning compliance industry, and the issuance of an international standard for such programs, there is no dearth of information on how to create and operate an effective one.
I have argued the case for a compliance requirement in several posts (examples here and here), as have many other GAB contributors (examples here and here). My most recent plea for mandating private sector compliance programs came in this one noting such a requirement in Vietnam’s new anticorruption law. But one thing I have not done is address two obvious questions about compliance programs that Matthew posed in a comment to the Vietnam post: How are compliance requirement laws enforced? How effective are they in practice?
It turns out these obvious, innocent sounding questions (the kind law professors always seem to ask) aren’t all that easy to answer. What I have found so far follows. Readers with more information earnestly requested to supplement it. Continue reading