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Media Briefing Note: Prime Minister's Anti-Corruption Summit Comes as Majority of Corporates Report 'Profits Over Prevention' Culture, according to Hogan Lovells Study

11 May 2016

Tomorrow Prime Minister David Cameron will set out a package of practical steps to expose and drive out corruption and punish perpetrators, but multinationals are failing to treat anti-bribery and corruption as one of their main priorities, says global law firm Hogan Lovells.

In a new study the firm found that the majority (59%) of corporates report a culture of ‘profits over prevention’, and the same percentage say people fear losing their jobs if they miss a target, while 57% say sales pressure and incentives are one of the biggest challenges to reducing bribery and corruption risk. The study also found that:

  • 45% of compliance teams in the UK say anti-bribery and corruption is not one of the CEO’s top priorities (compared to 40% globally) 
  • 49% of UK CEOs are not willing to walk away from a contract with high bribery and corruption risk (compared to 43% globally)
  • 54% of UK CEOs undergo regular anti-bribery and corruption training (compared to 59% globally)
  • 47% of UK-based multinationals have anti-bribery and corruption as a standing item on the board agenda (compared to 56% globally)

Steering the Course: Navigating Bribery and Corruption Risk, is based on interviews with over 600 chief compliance officers (CCOs) and equivalent roles at some of the world’s largest organisations across Europe, the U.S. and Asia. More than half (53%) of CCOs report resistance due to compliance procedures being seen to conflict with ‘getting the job done’, while 53% admit anti-bribery and corruption is seen as an unnecessary headache that ‘gets in the way’ of day-to-day operations.

Crispin Rapinet, global head of Investigations, White Collar and Fraud at Hogan Lovells, said: 

"In the UK we are lagging behind the U.S., Asia, and European countries like Germany and France when it comes to CEOs prioritising anti-bribery and corruption – it's not one of the top priorities for nearly half of CEOs, who are less likely than their overseas competitors to walk away from a contract with high bribery and corruption risk. 

"Complying with global regulatory standards while satisfying the corporate appetite for growth is a difficult balance to strike, particularly in a competitive market where profit pressures mean expanding into riskier markets with their myriad cultures and notions of what constitutes illicit behaviour. 

"With pressure from regulators around the world increasing, six in ten multinationals say they want to see an international code of best practice as they're still unsure where they should set the bar on compliance." 

Failure to implement

The study reveals that two thirds (66%) of CCOs feel their company is better at creating anti-bribery and corruption programs than implementing them – particularly across international borders. Programs fall short in several critical areas, including tailoring guidelines to local markets, training staff and setting the right tone at the top. 

In addition two thirds (60%) of CCOs saying that cultural differences cause a lack of support for anti-bribery and corruption, and yet, despite this, more than a quarter (28%) of companies do not tailor their approach to different markets and 43% do not make anti-bribery and corruption guidelines available in local languages. This could be preventing people from understanding the real essence of how employees should behave, leaving them to determine what is acceptable based on their personal moral compass or local customs.

53% of companies have only trained half of their staff or less in anti-bribery and corruption. As a result, the majority of firms are missing a simple and effective way of keeping anti-bribery and corruption front-of-mind and bringing guidelines to life with real life examples and the opportunity to practice relevant scenarios.

Crispin Rapinet continues: “The biggest challenge for multinational companies is to translate anti-bribery and corruption policies into effective guidance on the ground. Businesses need to make sure they are doing everything that is legally expected of them in all of the jurisdictions where they operate, to provide evidence that they help people decide what is acceptable and what constitutes bribery and corruption.

With regulators and prosecutors around the world uniting in the battle against bribery and corruption, and enforcement growing – even in countries where historically there has been minimal or no enforcement – multinational organizations cannot leave their survival up to chance. They must take proactive steps to make it abundantly clear that anti-bribery and corruption is in their company’s DNA.”

Please visit our Steering the Course microsite for a full copy of the report or to try our self-assessment compliance quiz. You can also request a copy of our compliance Benchmarking Model.

ENDS

Contact:

Orla O'Donovan

Senior Public Relations Adviser

Direct: +44 20 7296 2815

email: orla.odonovan@hoganlovells.com


Notes to Editors:

Table one: Percentage of CCOs who say people fear losing their jobs if they miss their targets

Region

Percentage

UK

59

Germany

56

France

56

US

62

China

49

Singapore

62

Japan

73

Table two: Percentage of CCOs who say anti-bribery and corruption isn’t a standing item on the their company’s board agenda

Region

Percentage

UK

53

Germany

45

France

51

US

37

China

30

Singapore

46

Japan

41

Table three: Percentage of CCOs who say their company is better at developing anti-bribery and corruption guidelines than enforcing them

Region

Percentage

UK

56

Germany

68

France

70

US

74

China

49

Singapore

62

Japan

73

Table four: Percentage of CCOs who say they do not tailor anti-bribery and corruption procedures individually to local markets

Region

Percentage

UK

31

Germany

32

France

23

US

19

China

28

Singapore

42

Japan

32

Table five: Percentage of CCOs who admit that anti-bribery and corruption is not one of their CEO’s top priorities

Region

Percentage

UK

45

Germany

46

France

52

US

28

China

37

Singapore

50

Japan

27

 

About the study 

The study spoke to 604 chief compliance officers or equivalent at 604 of the worlds largest multinational companies about anti-bribery and corruption, in 2016. The respondents were based in the UK (101), Germany (102), France (100), the US (151), China (57), Singapore (52) and Japan (41).

The companies had a minimum of 2,000 employees and at least £250m turnover, and operated in four sectors: life sciences and pharmaceuticals (124); energy, minerals and resources (138); transport, including aviation and automotive (152); and technology, media and telecoms (190).

About the Hogan Lovells Global Bribery and Corruption Task Force 

The Hogan Lovells Global Bribery and Corruption Task Force offers international clients informed advice in a number of areas of risk, from reactive incident response measures to the development of proactive strategies for managing potential exposure through compliance programs. 

Our task force brings together a cross-jurisdictional team of partners from Hogan Lovells’ international network with more than 25 years of experience in large-scale investigations. The task force has real experience on the ground in the United States and Europe (including the United Kingdom, Germany, Spain, Italy, and France), as well as in Russia, Asia (including China and Hong Kong), the Middle East, Latin America and Africa. Hogan Lovells is a recognized leader in investigations and fraud work, being ranked in the top tier of leading legal directories.

 
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