Consultants must urgently review their risk management processes related to bribery and corruption, according to research carried out by NCE and insurance broker Marsh.
Legislation soon to become effective
Publication of the research follows the launch last week of delayed guidance from the government on implementation of the Bribery Act.
Delivery of the long awaited document from the Ministry of Justice means that the legislation can become effective from 1 July.
The NCE/Marsh risk management survey shows that only 57% of firms are aware of their responsibilities under the new Act and only 28% have reviewed their procedures in light of the new law.
The Bribery Act received Royal Assent in April 2010 and was said by law firm Eversheds to herald the start of a “tough new era for corporate Britain”. It introduces four new criminal acts including a corporate offence of failing to prevent bribery with sanctions including 10 years in jail or unlimited fines.
International companies ‘can also be prosecuted’
Firms with international operations also face the prospect of prosecution if their local staff, agents or associated companies are found to have paid bribes.
Worryingly, only 43% of firms said that they were aware of the implications of the Act for their personnel and agents. Nineteen per cent of companies said that it would affect where they would do business in the future.
The only defence against bribery allegations is for firms to show that “adequate procedures” are in place to prevent bribes being paid.
Only 68% of respondents were aware of this.
Adequate procedures are covered in the guidance document and states that companies’ anti-corruption procedures must be well communicated and audited and that the measures in place must be proportionate to risks faced.
Hospitality not to be ‘criminalised’
The guidance also clarifies the position of companies providing hospitality to clients and other organisations.
“Bona fide hospitality and promotional expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an important part of doing business and it is not the intention of the Act to criminalise such behaviour,” says the guidance.
Businesses welcomed this clarification. “At least we know that we can serve lunch at a business meeting without the risk of going to prison,” said the director at a major consultant.
- Full results of the survey can be found in the NCE/Marsh risk management report in this issue.