WHAT does bribery mean to you? How about corruption? Is greasing palms an essential part of doing business or an illegal and ethically unsound practice that needs eradicating?
It sounds like a simple question and one to which the answer is obvious. Yet discussing the Bribery Bill currently passing through Parliament over lunch this week, I was surprised to hear one corporate adviser insist he believed bribery is a necessary evil and that he couldn’t see how most companies could manage without it, particularly those operating in many emerging markets where corruption is seen as the norm.
With the Bill set to become law before the General Election, it seems that my contact’s views on bribery and corruption are not unusual in London’s financial services industry.
But could this attitude be borne from a lack of knowledge about the impending laws rather than a deliberate attempt to engage in corruption in most cases?
Research from City law firm Eversheds has revealed a shocking level of ignorance about the threat corrupt practices present to the financial services sector – which could be hard hit by the legislation unless institutions get their houses in order. Eversheds found that financial services businesses are ill prepared for the tough new laws. One in four have no policy to address corrupt practices and – perhaps most worrying of all – 85 per cent of them are unaware that a bribery conviction carries a prison sentence of up to 10 years and unlimited fines.
The fact that merely failing to prevent bribery will be a criminal offence came as news to 46 per cent of those financial services firms surveyed by Eversheds.
Think about it. Someone in your department of the bank hands over a brown envelope to help ease a deal through. Your processes for preventing this kind of thing are found wanting and, as a director, suddenly you face a stint in jail as a result.
It may sound alarmist but Eversheds’ head of fraud Neill Blundell warns the worryingly relaxed attitude towards the Bribery Bill could easily see businesses in the financial services sector fall foul of the new law, which could lead not only to directors going to prison, but the company facing a severe financial penalty.
Blundell advises that in order to obey with the new law City firms should ensure adequate procedures are in place including a clearly written anti-bribery policy. Staff must be thoroughly trained in the new laws and what they need to do in order to comply. Purchasing decisions need closer scrutiny to ensure certain contractors are not given commercial advantages. Clear rules must be drawn up on corporate entertainment and gifts to include what is and what isn’t acceptable. Finally, a hard line must be taken on those who are found to be engaging in corrupt practices. email@example.com