K2 Global Consulting

by Jason N. Golub

The best way for a corporation or investment fund to inoculate itself against the risks created by increased enforcement of the United States’s Foreign Corrupt Practices Act and the advent of the United Kingdom’s new Bribery Act is to perform a rigorous audit.

Our experience is that control programs must go beyond compliance. They must deal effectively with large corruption and small, gain the support of employees and focus on identification of the highest risk individuals and entities. Who makes potentially corruptive decisions? How are they documented and monitored? What constitutes effective monitoring?

In many instances, violations of bribery laws occur because entities fail to properly train officers and employees to understand and appreciate the nature of relationships in the context of the FCPA and UK Bribery Act. While all employees must be trained and educated, training will be only be effective if the culture of compliance is set from the top.

In the event that a company learns of a potential FCPA or UK Bribery Act issue, it must act promptly and efficiently to minimize the impact on its business and investors. The company should obtain assistance on a range of issues including developing adequate policies and procedures, assessing books and records and training employees. In addition senior officials should understand how to conduct an internal investigation and what remedial actions to take if a violation is identified.

Overall, bribery and corruption risk must be integrated into all parts of an organization’s culture in order to be effective.  With an increasingly aggressive set of regulators focusing on bribery it behooves any company to be the “first to know” when bribery becomes an issue, and thereby stay ahead of any potential risk issues.

K2 Global can help organizations combat bribery. Our efforts can broadly address the following areas:

• Teach staff research and reporting skills on why and how corrupt forces may operate in areas you do business
• Evaluate and draft procedures relating to due diligence and hiring of intermediaries that are best in class
• Help build and maintain effective relationships with intermediaries
• Help comply with all laws and regulations
• Surpass the minimum “adequate procedure” required by the UK Bribery Act with best practices
• Investigate actual transactions and potential situations
• Conduct due diligence on potential business partners, acquisitions and intermediaries
• Incorporate training that is practical and applicable to real situations rather than legalistic
• Mentor compliance staff and provide ongoing support and guidance
• Draft Operations Manual for bribery accounting policies, oversight, procedures and response