Businesses Are Alarmingly Unprepared For The Implementation Of
The Bribery Act
Three quarters (76%) of senior executives have stated that their
companies have not financially invested in anti-corruption
strategies, with only 12% spending more than £500 on preparing for
the new Bribery Act. This leaves many UK companies at unnecessary
risk of the Act's harsh penalties according to new research from
leading business and financial advisers Grant Thornton.
Grant Thornton surveyed 166 senior executives on their attitudes
towards the passing of the Bribery Act and the implications it will
have on UK plc both at home and abroad. While 88% of respondents
believe the new legislation is a positive move for the UK, a
significant minority (40%) are concerned that complying with the
new Act will inevitably mean that the UK will lose out to foreign
competitors who are prepared to pay bribes to win business, leaving
many feeling that the Act is unfair.
Under the new Act "senior officers" who include directors
through to managers face personal criminal liability for offences
where it can be shown they connived or consented to offering or
receiving a bribe" either of a public official or a company
representative. Crucially it introduces a new corporate offence of
"failing to prevent bribery", however a company will have a defence
if it can prove that it had in place "adequate procedures" to
prevent bribery.
While the clear view from business is that the onus is on them
to eradicate bribery, 42% of these businesses have not yet
conducted a thorough assessment of their exposure to corruption
risk or established a clear plan to revise their existing policies.
90% of respondents think the government should be doing more to
promote anti-corruption measures to foreign governments, ensuring
that UK companies can compete on a level playing field with
overseas competitors.
"It is difficult to tell at this stage which aspect of the Act
will be the catalyst to move anti -corruption strategies up the
board agenda, although our findings show that it will probably be
reputational risk. However it is clear that these findings are not
exactly good news for the Serious Fraud Office (SFO) who have
undertaken an extensive outreach programme promoting the importance
of the new Act and the penalties that will come into force," says
Sterl Greenhalgh, Forensic Partner at Grant Thornton.
"This report shows that there is still confusion, uncertainty
and a certain level of complacency about the Bribery Act among
corporates. Indeed, these findings show the tension which already
exists between the commercial realities of doing business and being
legally compliant. On the one hand the measures that form the Act
are admirable and steer the path for UK plc becoming more
transparent and ethical and leading the way for others to follow
our standards. However it is clear that there is a sense of
frustration among businesses that the government has not made
greater inroads with other countries on anti-corruption strategies
to create a level playing field," continues Greenhalgh.
Certain businesses believe facilitation payments remain a
necessary evil
A key difference between the US Foreign Corrupt Practices Act
(FCPA) and the UK Bribery Act is that the UK continues to outlaw
facilitation payments. Businesses were lobbying hard for the
previous Government to review this as it is often seen as a
necessary evil. Indeed 23% of respondents agree that there are
situations where a facilitation payment is unavoidable in order to
do business.
"It is likely to be a long journey before UK plc can say it
fully complies with the new Bribery Act. Whilst there is an
understanding that more has to be done to eliminate bribes and
corruption in UK business practices, the UK cannot work alone on
this and the Government needs to intervene more, and act on a
collective platform with other countries and NGOs to tackle global
bribery if we are to remain competitive and emerge strongly from
the recent recession," concludes Greenhalgh.
ENDS For further information or a copy of the Grant Thornton
Anti-Corruption Survey Report please contact: Suvra Datta, Grant
Thornton Press office, 0207 728 2375 or via email on suvra.datta@gtuk.com
*Grant Thornton canvassed the opinions of 166 senior executives
in the United Kingdom. The majority of businesses surveyed (61%)
have an annual turnoverof between £50 billion to £1billion, while a
further 9% have a turnover in excess of £1 billion. Nearly 60% of
these companies are publicly listed on the FTSE or AIM market.
Nearly 90% of participants demonstrate the views of businesses
operating internationally, with the remainder representing insights
from domestic organisations.