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Firm-Wide Policy: ABC Compliance Program Elements #2

Posted in Anti-Bribery and Corruption (ABC) on September 25, 2024
Firm-Wide Policy

Firm-wide policy. A written anti-bribery and corruption compliance policy should be in place that prohibits the promising, offering, giving, solicitation, or receiving of anything of value, directly or indirectly through third parties, to influence action or obtain an undue advantage. 

Firm-Wide Policy

Firm-Wide Policy: ABC Compliance Program Elements #2

The anti-bribery and corruption compliance program prohibits falsifying or concealing any books, records, or accounts that relate to the firm’s business, its customers, suppliers, or other business partners, and it defines and identifies the heightened risk of interaction with Public Officials.

The compliance program allows employees to report potential bribery confidentially and protects employees from retaliation for good faith reports. It notifies employees of potential consequences of non-compliance and obtains strong and visible commitment from Senior Management, employees, and the members of the Board of Directors

ABC Policy

An ABC Policy should be applicable firm-wide and reflect zero-tolerance for bribery, and similarly, prohibit facilitation payments. It should be driven by the “tone from the top” from Senior Management and the Board and serve as a basis for all related ABC standards and procedures. The Policy, code of conduct/ethics statement or related handbooks should also reference all employees’ accountability, organizational reputation, and themselves from the risks arising from bribery and corruption and set out the potential consequences for non-compliance. The Policy should apply and be easily accessible to all parts of the front, middle and back office, including functions such as Finance, Tax, Operations, and Human Resources.

The Policy should apply to and address the potential bribery and corruption risks that can arise in departments such as Corporate Affairs, Marketing, Sponsorships, Facilities, Business Development, Corporate Real Estate, and Procurement, particularly given their close interaction with external vendors and service providers. By their role, certain temporary staff, outsourced service providers, contractors, and other personnel may also be in scope.

The Policy should prohibit any improper accounting or concealment of complete and accurate financial activity. Front, middle, and back-office employees share responsibility for accurately documenting the provision of anything of value provided to customers, potential customers, and Public Officials, as well as payments to third parties and any approvals mandated by other internal policies and procedures, in a manner which is transparent to monitoring and assurance. The organization may also consider maintaining documentation for anything of value provided by customers, potential customers, Public Officials, and third parties. Applicable legal and regulatory requirements should maintain documentation.

Firm-Wide Policy

ABC Laws

ABC laws generally treat Public Officials (see proposed definition below), whether domestic or foreign, as well as their representatives/agents, as presenting higher corruption risks for companies seeking to obtain or retain government business or to obtain or influence government action (e.g., legislative action, regulatory approvals or licensing). The organization should ensure that their policies identify the heightened risk of interaction with Public Officials and provide a clear definition of the term to assist employees in identifying the associated risks. Such definition may include the degree of state ownership, control, or influence of an entity that would cause the organization to treat employees of that entity as public officials.

The organization should establish a process to receive, investigate, resolve, and document reports of alleged misconduct, including bribery and corruption. The process should include a reporting “hotline” or other reporting mechanisms available to all employees and, potentially, external parties, allowing for anonymous reporting, where legally permissible. Further, each organization should ensure and publicize that the employees who make good faith reports of potential misconduct will not be subject to retaliation.

The organization should have appropriate guidance for persons responsible for undertaking investigations into bona fide allegations of misconduct. The guidance should require appropriate confidentiality throughout the process and ensure compliance with applicable laws or regulations. In some situations, it may be advisable to retain outside counsel or accounting resources to assist in conducting the investigation.

Appropriate disciplinary measures should be taken when an investigation confirms a violation of anti-corruption laws or the policy. The organization should also take steps to remedy the individual harm of such activity and, if appropriate, reasonable steps to mitigate its re-occurrence in the future.

Final Thoughts

Anti-bribery and corruption compliance (also known as ABC compliance) is critical for your organization because noncompliance poses significant risks. It is also significant because bribery and corruption dehumanize people and undermine economic growth and opportunity. To avoid such harm and positively contribute to societal growth, you must have ongoing anti-bribery and corruption compliance procedures in place. If you do not have one, you must install one. If you already have one, there’s nothing stopping you from improving it.