With corruption becoming a bigger issue for companies doing business abroad, a new book offering advice on how to mitigate the risk couldn't come at a better time.
The Department of Justice and SEC initiated 40 Foreign Corrupt Practices Act related actions in 2009, up from 33 in 2008. Criminal and civil corporate fines this year area already exceed $400 million, a pace that would exceed the $645 million that companies paid last year, according to William P. Olsen, principal in the Advisory Services practice and National Practice leader of Investigations at Grant Thornton.
In his newly released book, The Anti-Corruption Handbook: How to Protect Your Business in the Global Marketplace, Olsen offers CFOs, internal auditors, compliance offices and forensic accounts common sense approaches for detecting and deterring corruption, and to successfully navigate the minefield that corruption represents for those doing business in other countries.
"Corruption is bad for business," Olsen said to CFOZone. "It creates inequities in market operations and unfair advantages to those operations that participate."
The book tackles topics like procurement and construction fraud, money laundering, the internal controls and accounting provisions of the FCPA and other US laws that apply to corruption.
Set the tone from the top. It is crucial that all elements of a company's policies receive the full support of upper management. Policies must be clearly documented and enforcement conducted at all levels, or the policies will be marginalized. "If upper-level management does not take efforts to combat corruption seriously, then neither will employees," Olson said.
Train everyone. Legal and ethics training should not be limited to lower levels but should also include board members and senior management officials. Training materials should provide details of local laws as well as the FCPA. Training materials that are both interactive and cost effective can help build and maintain support for the program.
Emphasize integrity. Policy statements and training should underscore the overall message that the company operates with integrity. Establishing value statements for a company and reinforcing these statements through direct actions of leadership will set important examples. "Messaging this to employees, senior management and board members is critical to the success of an anti-corruption compliance program and the overall success of a company," Olsen said.
Monitor compliance. To provide accountability, responsibility for compliance should be given to high-level managers who have access to senior-most managers with the capacity to influence policy.