Bribery and corruption are highly complex areas of law, which can create an unlevel playing field for business and present numerous challenges for law enforcement.
Effective corporate compliance programs help to ensure that corporations are playing by the rules, and even in situations where rogue employees have committed offences, may help to mitigate the culpability of the organisation by showing that it has adequate procedures in place.
While it has been observed that tailored approaches are required for companies to develop effective compliance programs, the same level of detail and scrutiny needs to be applied by law enforcement in monitoring and supervising the effectiveness of these programs.
The tick-and-flick approach simply won’t do. Law enforcement, together with prosecutors and courts, need to be able to distinguish well-designed programs from those that were merely for show.
In a recent publication, the Asia-Pacific Economic Cooperation provides guidance on the best practices in monitoring and supervising effective corporate compliance programs.
Why are a set of best practices required?
Having clearly defined best practices for monitoring compliance programs will increase the ability of law enforcement to detect, investigate and prosecute individuals and corporations for their liability in cases of domestic and foreign bribery.
The identification and use of different systems of monitoring and supervision may help law enforcement to tailor their approach to each specific situation, based on a range of factors such as the nature of the business, international considerations, and any other specifics pertaining to the compliance program.
For example, has the program been developed due to requirements resulting from a deferred prosecution agreement, or has it been established based on the initiative of the organisation to do the right thing?
What does an effective compliance monitoring program entail?
Generally, compliance programs involve the following eight elements:
- Risk assessment.
- Policies and procedures.
- Leadership commitment/culture.
- Training and communication.
- Third party management.
- Reporting and investigations.
- Incentives and disciplinary actions.
- Monitoring or auditing.
Effective monitoring and supervision will look at whether all these elements are in place, and whether they are effective in preventing misconduct, can detect offending behaviour (if it does arise), and that they align corporate behaviour with applicable laws and regulations.
An effective program will also consider the relationships between individuals, the organisation, and the different systems in place.
International standards on corporate compliance
A number of international standards such as the OECD Anti-Bribery Convention and the United Nations Convention Against Corruption provide guidance as to how corporate compliance may be satisfied.
These standards can help to ensure a consistent global approach by law enforcement in the monitoring and supervision of corporate compliance programs.
Corporations who have engaged in foreign bribery and corruption will not be immune to prosecution simply because they have a compliance program. Law enforcement and the judicial system will increasingly scrutinise compliance programs in line with established best practices and international standards to hold companies accountable and strengthen the fight against global corruption.