Bribery Still Rife as 80 Percent of Executives Admit Seeing It
In a survey of 500 executives from companies located in 12 countries, 59 percent of executives said their anti-bribery policies didn’t work and 87 percent believed the policies made it more difficult to build their business, according to the report from U.K. law firm Eversheds. Thirty-three percent of those asked said they didn’t do due diligence on anti-bribery measures when exploring mergers and acquisitions.
Tackling bribery and corruption has become a political issue in the U.K. in recent years as lawmakers recognize the impact on the economy. Prime Minister David Cameron will host an Anti-Corruption Summit in London next week, bringing together leaders to discuss the global response. The issue came to the fore last month with the so-called “Panama Papers” scandal, where numerous documents leaked from Panamanian law firm Mossack Fonseca showed how some of the world’s wealthiest people channeled billions through offshore accounts, raising questions about tax evasion and money laundering.
The U.K. overhauled its bribery laws in 2011, introducing a corporate offense for failing to prevent bribery. Construction company Sweett Group Plc became the first firm to be convicted under the new legislation in February and was ordered to pay about 2.3 million pounds ($3.3 million). Law enforcement agencies have been criticized by lawmakers and businesses for not bringing enough prosecutions, after companies spent millions to revamp their compliance procedures.
“The reality is that corrupt business practices will always occur, particularly in high-risk jurisdictions,” said Neill Blundell, a fraud lawyer at Eversheds. “What matters is the way an organization responds. Governments have typically tried to fight bribery by deterring companies with high-profile prosecutions, but they need to work with the private sector to articulate the business case for anti-bribery.”
Only 9 percent of executives surveyed saw legal consequences as the main reason for preventing bribery and corruption, with the majority — 61 percent — saying the potential impact on commercial success was the leading motivation. They also cited damage to reputations.
The survey, which used data from companies with more than 500 employees, sought responses from developed and emerging countries including the U.K., Italy, Brazil, Hong Kong and China. The contributing companies spanned a range of sectors such as finance, health care and education. Bloomberg