[Guest Author: Michael Volkov]
Global companies face unprecedented third party risk in today’s landscape—third parties are involved in 90% of Foreign Corrupt Practices Act (FCPA) cases, and more companies are under investigation than ever before in the history of FCPA enforcement.
To build an effective anti-corruption compliance program, organizations need to follow the required elements for an “effective” anti-briberycompliance program outlined in the United States Sentencing Guidelines (Sentencing Guidelines) and The Resource Guide to the US Foreign Corrupt Practices Act of 1977 (“FCPA Guidance”). (See my whitepaper A Holistic Approach to Anti-Corruption Compliance for a list and details on each of the eleven elements).
However, to build a program that truly serves the needs of their organization both today and in the future, compliance professionals must help their organizations achieve a new level of performance. (For more details and best practices on this subject, access my complimentary webinar Practical Strategies for Implementing Effective Due Diligence Systems.)
Next Generation Effectiveness: Automation, Accuracy, and Frequency
Best practice program leaders are asking the question: Are we doing everything we can to appropriately, aggressively, and efficiently manage our third party risk?
More and more, compliance professionals are seeing that their organization may be falling behind the curve in three key areas of best-practice third-party due diligence: automation, accuracy and frequency.
Automation: In the rapidly changing world of global business, outmoded, time-consuming, paper and e-mail-based manual approaches will no longer suffice. Automation not only creates efficiencies, it improves communication between departments, standardizes reporting and practices across business unites and geographies, and simplifies convoluted processes.
Accuracy: False positives are time consuming to remediate, and can create an inaccurate picture of an organization’s true risk. Organizations that leverage top-tier, human-reviewed research databases increase their accuracy, and more effectively screen, assess and mitigate risks.
Frequency: Gone are the days when it was okay to monitor third party risks periodically. As organizations’ third party networks expand, so does their risk. Continuous monitoring that identifies changes in third-party risks in real time allows compliance professionals to confidently manage business risk.
To Compete in the Global Economy, Get Ahead of the Curve—Or Get Left Behind
These trends are having a significant impact on the compliance profession. The true benefit of stepping into the future of third party risk management, compliance professionals will create the bandwidth to do what they do best: mitigate and reduce enterprise risk; strengthen their anti-bribery and corruption programs; and help their organizations thrive in a global economy.