NEW YORK—Despite significant investment in anti-bribery compliance, most executives of large firms are concerned about their exposure to bribery risk, and many are falling short of best practices with respect to third-party screening, facilitating payments and political donations, according to a June 6, 2012 survey released by New York-based Kroll Advisory Solutions.
Results of the survey reflect phone interviews with 139 senior corporate compliance executives from companies ranging in size from $100 million to more than $10 billion in revenue per year that were conducted from July 2011 to February 2012.
According to the survey, 69% of all respondents said they were either moderately or highly exposed to bribery risk. This increased to 100% in the pharmaceutical industry and dropped to 46% in the financial services industry.
A total of 95% of respondents said their firms' exposure to bribery risk had increased or held steady over the past two to three years, and 85% believe it will increase or stay the same in the future, according to the survey.
Among those who believe the risk is increasing, 24% attribute it to an expectation that globalization will increase the number of international clients with whom they will be dealing, while 17% pointed to specific risks emanating from emerging markets and 9% cited a growing reliance on third parties.
The survey also found that 53% of respondents had increased their budgets in the past year, while 49% said they have increased hiring, and 22% said they have centralized compliance decision-making.
When asked how confident they were in their anti-bribery compliance programs, 70% said they were very well prepared, while 23% said they were somewhat well prepared, 4% said they were extremely well prepared and 3% said they were not very prepared.
David Holley, a senior managing director with Kroll Advisory Solutions, said in a statement, “Multinational corporations continue to take advantage of the burgeoning opportunities overseas, despite the heightened regulatory climate and increased anti-bribery enforcement.
“Our survey participants, for the most part, believe they are addressing these challenges head-on and doing those things necessary to not run afoul of the (Foreign Corrupt Practices Act), the U.K. Bribery Act, and other anti-bribery regimes.
“While gaps remain the message has reached the C-suite that addressing this risk plays a meaningful role in determining the entity's success overseas.”
Copies of the survey, the 2012 FCPA Benchmarking Report, are available here.
Experts say multinational organizations operating in countries where bribing officials can be a condition of doing business face heightened enforcement of anti-corruption laws by U.S. agencies, but strong compliance and training programs can go some way toward mitigating the risks.
For in-depth coverage of this topic and related issues, visit the Business Insurance Solution Arc on A World of Risk: Managing Foreign Bribery and Corruption Exposures.