Dow Jones Survey on Corruption

Dow Jones has published their State of Anti-Corruption Compliance Survey 2011, with responses from over 300 company executives from more than 40 countries.

Here are some of the overall results:
  • Fearing noncompliance, more than 55% of companies delay or avoid working with global business partners.
  • Less than a third of companies monitor business-partner integrity.
  • More than 40% of companies have lost business to competitors that won contracts unethically.
  • Nearly two thirds of executives believe businesses should always report suspected bribery by a competitor to the appropriate authorities.
  • Almost three quarters of respondents have anti-corruption programs in place, with consistent rates of implementation across all regions and industries.
  • Nearly half the companies’ lack confidence in their due diligence processes.

What does all this mean?

  1. The risk of doing business with unethical companies is real, but companies don’t have a lot of confidence that they have the processes in place to identify them before entering into business relationships.
  2. Internal audit and risk functions should have this on their radar.

Posted on Apr 4, 2011 by Norman Marks

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  1. Speaking about the Anglosphere for a moment, there are two laws that are pertinent to the Dow Jones Survey on Corruption - the United Kingdom's Bribery Act and the United States' the Foreign Corrupt Practices Act (FCPA). I think the UK is experiencing the same growing pains the US encountered when it ratified the FCPA in 1977. Disregarding the efficacy of the two laws for a moment, it is good for a consumer-facing enterprise to be concerned with good business practices. It is extremely easy today for a customer to take their business somewhere else - or for your customers to organize against you in active and passive ways. With that said, risky business practices happen on the margins - and are lethal. For UK companies, that is where a good, solid, well versed Legal Counsel will be handy. Educating our management on where unneeded risks are located and mitigating those risky areas is a good thing. If there is good to come out of the Bribery Act, or the new emphasis in enforcing the FCPA, it will be focusing our managers' minds on these deadly enterprise risks. Our management's willingness to listen? That's a different story for a different time!

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