North America Far Behind Europe in Fight against Global Corruption

more+
less-

North American companies lag behind the rest of the world when it comes to implementing anti-bribery training and policies, according to recent statistics from The Conference Board Inc.(TCB).

TCB's analysis found that only 22% of North American corporations have adopted formal anti-bribery policies, compared with 61% in Europe, 54% in Latin America and 30% in the Asia-Pacific region. It also found that while 39% of Standard & Poor's Global 1200 companies have a formal policy against bribery, less than 25% of the larger companies on the S&P 500 have one. The sector analysis also revealed that materials companies are the most likely to have an anti-bribery policy, while those in the consumer discretionary sectors, e.g., cars or apparel,are the least likely to have one.

The Organisation for Economic Co-operation and Development (OECD) Secretary-General Angel Gurrìa recently referred to global corruption as one of the most systemic threats of the 21st century. The estimated $1 trillion in bribes handed out each year distorts markets, increases the costs of doing business, erodes public trust in governments and perpetuates poverty. Accordingly — in the face of an increasingly global economy — the world community has boosted its efforts to combat corruption, with more countries implementing anti-bribery laws and enforcement efforts at record levels.

Businesses are also more aware of the issue and their responsibility to promote anti-bribery compliance. In the face of escalating enforcement and heightened sensitivity of the public,, North American companies have improved and strengthened their anti-bribery practices. TCB data shows, however, that they are not effectively communicating their policies to their investors and stakeholders. By contrast, Europe and several other countries are better at publicizing their anti-corruption policies due to a longer tradition of communication with their stakeholders on such matters.

Formalizing anti-corruption policies and conveying them to stakeholders helps to reassure investors, the public and authorities by proving a company's commitment to honesty and transparency. Compliance also helps reduce legal risk, offers a competitive advantage and facilitates any government investigations that may occur. On the other hand, violations can lead to criminal penalties, large fines, incidental financial damages and significant harm to a company's reputation.

Global corporations must comply with anti-corruption laws such as the Foreign Corrupt Practices Act, the UK Bribery Act and Canada’s Corruption of Foreign Public Officials Act, as well as the Inter-American Convention against Corruption and the OECD's Anti-Bribery Convention.

Topics:  Anti-Bribery, Compliance, Corruption, FCPA

Published In: General Business Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© WeComply, a Thomson Reuters business | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »