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Bribery and Corruption: Compliance programs - EY - United States

Bribery and Corruption: Navigating the Global Risks

Compliance programs

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Anti-Corruption Compliance Program

EY - Anti-Corruption Compliance Program
There are no quick fixes when it comes to bribery and corruption.

Bribery and Corruption: Navigating the Global Risks suggests there is no one-size-fits-all anti-corruption compliance solution. Instead, the book makes the point that global organizations are best served by developing customized, holistic programs.

Bribery and corruption are widely viewed as significant problems and a barrier to economic and social stability in developed and emerging nations. As a result, basic risk mitigation structures have evolved into complex anti-corruption compliance programs. But in many instances, global organizations are left vulnerable due to an organizational culture that accepts or ignores signs of bribery, corruption and fraud.

Anti-Corruption Compliance Program

EY - Anti-Corruption Compliance Program

There are no quick fixes when it comes to bribery and corruption, but we have identified several elements that should make up the foundation of an anti-corruption compliance program. These are designed to fundamentally change an organization's culture, identify and address potential issues before it is too late, and contain instances of bribery and corruption, once they are discovered, with minimal impact to the business.

Bribery and corruption as cultural phenomena

Chief among these elements is the need to view bribery and corruption as cultural phenomena. Fraud may manifest itself in seemingly minor transactions across an organization, so the tone set by senior leadership is critical in driving employees to be vigilant.

No organization is immune to bribery, corruption or fraud, therefore, a strong reactive element must be in place to execute an internal investigation and cooperate with the appropriate regulatory authorities.

Deter, detect and prevent bribery and corruption

Anti-corruption compliance programs vary widely from company to company. However, over the past decade, a consensus of leading practices has emerged.

Anti-corruption compliance goals are accomplished through a structure that includes people, processes, and technology.

  • People focuses on the individuals tasked with developing, implementing and monitoring a company's anti-corruption compliance program.
  • Processes are the elements of the anti-corruption compliance program and include conducting risk assessments; the adoption of policies and enhanced financial controls; anti-corruption training, audits and monitoring mechanisms; and continuous review and improvement.
  • Technology includes the tools used to assist in carrying out the overall compliance mandate and can include the accounting system, the company's website, the company's online training system, online travel and entertainment, and vendor payment and approval controls.

Global anti-corruption program must-haves

Global anti-corruption programs should include a code of conduct and policies regarding gifts, training, political and charitable contributions, and delegation of authority, as well as accounting policies regarding the proper recording of transactions.

Specific attention should be paid to risks derived from the nature of the organization's operations, the degree of business with government entities, business locations and company size, and the regulatory environment it operates in.

An effective anti-corruption compliance program needs to be risk based to ensure that it is properly designed to implement strategies and allocate resources to mitigate the specific and most substantial risks of corruption and bribery facing the organization.

Proactive to be reactive

A key component of a cohesive anti-corruption program is the establishment of reactive elements. An incident response plan can be basic but it is a necessary tool for global organizations to have on hand. By taking proactive steps, companies may save significant sums of money and prevent irreparable harm to their reputation. The incident response plan should encompass investigations, remediation and uniform disciplinary processes.

Incident Response Plan

EY - Incident Response Plan

Our perspective – Three aspects of a holistic anti-corruption program

  1. Setting the proper tone at the top within the organization through policies and procedures
  2. Proactively identifying corruption risks and monitoring internal controls to prevent or detect the risks
  3. Developing reactive protocols in the event that corruption is suspected

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