Perception vs reality of corporate corruption risk (infographic)
Friday, September 17, 2010 | Posted by: Grant Thornton
Categories:
Corruption
| Tags: emerging markets,
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business,,
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corruption,,
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Bribes, backhanders, suspiciously lavish corporate hospitality, corrupt officials or local operators on the make… corruption oils the wheels of industry in markets across the world. But the stakes of being associated with these got markedly higher this year with the new UK Bribery Act. Is your company aware of the risks?
The problem is that many companies are not aware of their increased levels of liability or the new legal risks that threaten their business. The drive for growth is also increasing corporate corruption risk as businesses expand into emerging markets where corruption may be endemic.
Previously we posted about where the new risks lie, and how to mitigate them in When corporate hospitality could equate to bribery - and other new risks arising from new Bribery Act.
Now, in this infographic, we show the differing levels of awareness of corruption risk versus a direct experience of it, across various sectors including financial services, technology, energy/extractive, food and travel, industrials, property and construction, and business support services.
Unsurprisingly, perception and reality are at odds – the chart shows quite low levels of awareness of corruption risk against the actual risk they face. The overall result shows only 13% of companies surveyed were aware of the risks; meanwhile, 17% had had direct experience of corruption in their industry.
The source of the data is Grant Thornton’s Anti-corruption Survey 2010 – which surveyed more than 160 UK businesses on their awareness and understanding of corruption risk and current issues, as well as highlighting trends in legislation and policy and strategy.
Read the full report: Anti-corruption Survey 2010.
You might also like:
* More Grant Thornton infographics
* M&A insight – who’s buying and in what sectors?
Reader Comments (4)
Paul, you’re right; training is critical but the challenge is how to deliver the message effectively across an organisation. A CEO does not require the same training as a sales manager out in the field. A supply chain manager will be different from intenral audit and so on. Add in the potential for foreign language training in different overseas locations and things start to get particularly tricky. If ever there was a case of one-size-doesn’t-fit-all solution then this is it.
Added Wed Nov 2010 at 07:11:09
At The Network we’re getting more and more questions and requests for guidance from clients who want – but aren’t sure how – to ensure compliance by those up and down the supply chain. Effective training (and subsequent re-training) of everyone, from directors, officers and employees to agents and third parties is a critical first step. But, as you point out, Ben, how do companies make sure their reach is adequate? That will be a significant challenge moving forward.
Added Wed Nov 2010 at 03:11:38
Steve, its a very interesting point you raise. The draft guidance appears to suggest that suppliers and contractors are captured. How one is to practically to carry out due diligence further down a chain will be a matter of concern. There could easily be key agents of which you are not even aware employed by a broker or other intermediary so you cannot conduct any due diligence yourself. The other area that I can forsee issues is consortia - how much due diligence are you expected to do on consortia member when often you only have a relationship with the consortium lead partner.
Added Fri Nov 2010 at 05:11:16
I would be very interested in other’s views on Sec. 7 - The Associated Person. How far down a chain does a principals liability extend? What problems do others envisage re this issue because potentially it could have very far implications for business relations.
Added Mon Nov 2010 at 10:11:53