Kroll, the global leader in risk mitigation and response solutions, together with the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices, today released the 2017 Anti-Bribery and Corruption Benchmarking Report (“ABC Report”).
The theme of this year’s ABC Report is “Beyond Regulatory Enforcement: The Rise of Reputational Risk.” Against a backdrop of heightened regulatory and reputational concerns, more than one-third (35 percent) of all risk and compliance professionals surveyed expect their organization’s bribery and corruption risks to increase in 2017, and more than half (57 percent) expect them to persist at the same levels as last year.
Respondents believe the top risks to their anti-bribery and corruption programs will come from third party violations (40 percent), a complex global regulatory environment (14 percent), and employees making improper payments (12 percent).
The reputational risk associated with bribery and corruption allegations is also on the minds of most respondents. Indeed, general reputational concerns went from being the least likely reason identified in last year’s ABC Report for a third party to fail a company’s vetting standards to being the most likely reason — a stunning change in just one year.
“It is clear the anti-bribery and corruption program can be viewed in the context of regulation, as well as more broadly as a means of protecting an organization’s most valuable asset — its reputation,” said Steven Bock, Managing Director and Head of Operations and Research with Kroll’s Compliance practice.
In a related development, the survey data suggests senior leadership’s engagement regarding anti-bribery and corruption efforts is on the rise. Fifty-one percent of respondents state senior leadership at their organization is “highly engaged” with anti-bribery and corruption efforts, a 4 percent increase over the previous year.
“All research points toward a clear link between ethics and performance, and with more involvement from leadership, we are seeing that anti-bribery and corruption efforts are being prioritized,” added Erica Salmon Byrne EVP & Executive Director of Business Ethics Leadership Alliance, Ethisphere. “Smart companies with strong compliance programs are taking note and adjusting their priorities accordingly in order to mitigate unnecessary risk and protect their company’s valuable reputation for integrity.”
Another strong trend that emerged in this year’s ABC Report is the dependence on ongoing compliance monitoring to capture post-onboarding bribery and corruption issues. More than half (55 percent) of respondents report they identified legal, ethical, or compliance issues with a third party after conducting initial onboarding due diligence. In 40 percent of these cases, the issue that was later identified did not exist at the time of initial onboarding. The value of ongoing monitoring is reflected in the level of confidence that survey-takers have in their ABC programs. Nearly 80 percent of those respondents who monitor all of their third parties, regardless of risk profile, believe they are either extremely or appropriately prepared to address global bribery and corruption risks. Conversely, feelings of preparedness drop as the level of ongoing monitoring goes down.