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How to Achieve Disclosure Consistency in Bribery, Fraud, Corruption and CSR Reporting

9th December is United Nation's International Anti-Corruption Day. Anti-corruption efforts, policies, procedures and processes are non-compromising, relevant, material and direct. They require updated insights, best practice and need to know information to raise awareness of corruption and the role of the company and leadership by the officers in combating and preventing bribery and corruption.

Porbunderwalla Kersi
Porbunderwalla Kersi
Corruption continues to be prevalent in many countries. This is a serious problem because it hinders the country's development. Corruption is a complex social, political and financial situation that affects all countries. Corruption undermines democratic institutions slows economic growth and contributes to corporate and governmental instability. Corruption attacks the principles of democratic institutions by distorting electoral processes, perverting the rule of law and creating bureaucratic dilemma by the continuous soliciting of bribes (1) .

Structured methodology
Compliance to the FCPA and UK Bribery Act often mean different things to different people. However non-compliance to FCPA and UK Bribery Act and related international mandates means that dreadful things happen—even to good companies—the results can often look depressingly similar, with large fines, damaging press coverage and an awful hit to the company brand. The list of highly reputed companies that have got themselves in this mess is increasing.

Cultural norms may make it difficult to determine which countries have the most reliable or most corrupt public or private sector. This makes it necessary to design flexible and structured Governance, Risk Management and Compliance (GRC) methodology that is suitable all around the world. The key issues differ: e.g. in Afghanistan corruption can lead to the disappearance of several hundred million dollars, in the west it may be the different types of Ponzi schemes, in Nigeria there may be a requirement by hospital nurses to impose a fee for each false alarm to provide continued treatment.

New reporting requirements
With increased demand for transparency and greater corporate social responsibility, the new EU directive will require that companies report on exactly what policies, processes and procedures they have in place that prevents corruption.

The EU Commission has recently presented the new accounting directive. The anti-corruption component of the directive is that companies must report on their corporate social responsibility - including their activities to combat corruption. The regulation is expected to be finalized in the spring of 2014.

The change is that previously, companies only reported on their environmental conditions, however with the new adoption of the new directive it will be for the first time that the reporting requirement must also contain material anti -corruption activities introduced by global companies.

Benchmark your anti- corruption program
Previously, disclosures were often prepared by the marketing department, with platitudes and expensive idealistic wishful-thinking programs. This time such disclosures are a thing of the past because both the U.S. FCPA (1977) and the English Bribery Act has global jurisdiction and is fairly comprehensive in its scope. Therefore, corporate entities must allow for proper and structured introduction in building an effective compliance program to fight corruption, both within their own organization and among business partners and third parties.

From Visibility to Creation of Values
Additional disclosures and reports on environmental, social and employee-related issues, concerns regarding respect for human rights, CSR and many other ‘soft law’ components, can be under the auspices of the United Nations Global Compact, the Global Reporting Initiative (GRI) or Copenhagen Compliance. To support the new trend of accountability and transparency there must be a disclosure uniformity that include those concrete results achieved by the implemented GRC policies and demonstrate how the company manages these risks, associated with all of the above components. The above-mentioned compliance reporting structure will also ensure that the GRC process later on can be automated.

The primary purpose of compliance is to create value, if the GRC actions are made more transparent. Instead of regarding the new reporting requirements as a single one-off, non-renewable initiative, we recommend that companies take a more holistic GRC approach. We often see that a controlled GRC method provides the right answer, solution and the opportunity to achieve far greater compliance and understanding. Visibility also provides the capability so that all corporate managers and employees take anti-corruption GRC agenda seriously. Thereby the established zero -tolerance practice makes sense and does not simply act as a golden rule.

The EU directive applies to companies with more than 500 employees and either a balance of 20 million € or net revenues of 40 million €. A total of approx. 16,000 businesses at EU level will be affected by this EU directive.

We call it Copenhagen Charter® and Copenhagen Compliance ® because Denmark is obliged to provide guidance as she continues to be on the top of the list as the least corrupt country in the world. Copenhagen Charter® and Copenhagen Compliance ® helps all global companies to steer clear of the non-compliance risks by providing information and guidance services on the components of corporate governance, risk, and compliance. We have comprehensive global coverage, analysis, research databases and interactive tools support companies and corporate executives—to stay informed, as we head into an ever-more-intensive regulatory environment.

(1) Corruption in Nigeria.

Kersi Porbunderwalla is the founder and CEO of Riskability®, Copenhagen Compliance® and Copenhagen Charter®.
After his early retirement from ExxonMobil, Kersi has been involved in several Global Good Governance, Risk Management and Compliance (GRC) Projects for multinationals like IBM, Shell, BP, Volvo and others.
He continues to implement GRC journeys for a variety of clients to develop custom tailored GRC folder that includes methodologies, roadmaps, and specific solutions to assignments, training and certification.
Kersi conducts workshops, seminars and conferences that focus on developing and implementing GRC applications & frameworks into operational environments.
He is a consultant, instructor, researcher, commentator and practitioner on 4 continents.

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Vendredi 13 Décembre 2013

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