Bribery Act comes into force in April. And it has been causing a stir: while it is replacing the outdated law we currently have, it has been criticised by small and medium-sized businesses (SME) for creating extra layers of bureaucracy and leaving directors potentially liable for the actions of suppliers and service providers – both in the UK and abroad. A few clarifications on the finer detail of this law are due soon, but a rough guide on the legislation has already been published (you can find information on the Ministry of Justice website). It is important to make provision for this new law because, as Ernst & Young’s fraud expert, John Smart says: “With these sorts of things there tends to be one company that gets made an example of, then other companies take the lead from that.” With the deterrent of 10 years in jail and an unlimited fine, nobody wants their business to be that example. Here are five ways to take precautions.
“It’s important to show you’ve taken some action,” Smart says, “businesses should appoint an ethics officer and someone, either internally or externally, to do a risk assessment.”
It is important to record these actions, logging concerns and keeping records. Some law firms have suggested that businesses need to go as far as keeping a file on the gifts they have rejected. “It’s basically about being able to prove your transparency,” Smart explains.
Working out what you can give or offer clients is tricky since you are required to judge whether or not a gift or corporate entertainment counts as “appropriate”. This could mean its acceptable to take a top banker to the Ivy for lunch but not a junior compliance officer.
3. KNOW WHAT’S GOING ON
It is important to know exactly what is going on in your company, especially if you operate in countries where corruption is rife. It could be a shrewd move to employ a risk assessment company to investigate your oversea operations.
4. MESSAGE OF ZERO TOLERANCE
Smart advises you should demonstrate that the message of zero tolerance comes from the top of the organisation. “Have a board meeting,” he advises, “and get someone to take minutes. Then put an anti-bribery measure into your code of conduct.
5. ORGANISE TRAINING
If you’re really concerned about the actions of your employees, it might be wise to give your staff some training. Smart says: “Make sure your employees understand the act by giving them some training. Then keep hold of the training materials to provide evidence that you’ve taken precautions.”