Following a recent survey on the implementation of the Bribery Act and its impact on the SME community, we look at the findings of this review and the lessons that can be learned for those businesses.
The Bribery Act 2010 (the Act) has now been in force for four years with the stated aim of improving corporate governance and ensuring that the UK was at the forefront of anti-corruption and compliance marketplace.
Having generated much activity and excitement at the point of its introduction, a recent report commissioned by the Ministry of Justice (MoJ) and the Department for Business, Innovation and Skills (BIS) assessed the impact and awareness of the Act in the SME community and with some interesting findings.
Broadly, these findings have suggested that there remains a pressing need to increase awareness amongst the SME community of the Act and the corporate offence of failure to prevent bribery and corruption. The findings below are particularly noteworthy:
- 34% of SMEs surveyed either had not heard of the Act or were not aware that they could be liable for failing to prevent bribery.
- Of those 64% of SMEs that were aware of the Bribery Act, only 72% perceived that their company had sufficient knowledge and understanding to be able to implement adequate anti-bribery procedures.
In addition, on review of those bribery prevention procedures in place across those SMEs surveyed, the report raised additional concerns about the extent to which these extended beyond those common financial and commercial controls (such as bookkeeping, auditing and approval of expenditure) and high level articulations of a company’s committing to winning business not through bribery.
Reflecting upon these figures, this lack of awareness amongst SMEs may well be linked to the scarcity of Bribery Act prosecutions, and whilst it seems unlikely that those already stretched resources will be channelled into raising this number, it goes without saying that the Act and its implications for business should not be ignored.
It is clear is that further work is needed, not only raise awareness of these provisions but also to address the disconnect between the level of protection that SMEs believe they have in place against bribery and corruption that which they actually have.
A key focus of the report is to raise awareness amongst SMEs in particular of the Ministry of Justice published guidance to assist businesses in deciding what bribery prevention procedures will be right for them.
The guidance is designed to be of general application and is formulated around six guiding principles designed to assist in determining what will be adequate procedures in the context of your business.
Whilst businesses should review the detail of this guidance when conducting an assessment of any systems already in place, the six key principles are:
- Proportionate procedures
Procedures to prevent bribery must be proportionate to the bribery risks faced and to the nature, scale and complexity of the commercial organisation’s activities
- Top level commitment
Top-level management fosters a culture within the organisation in which bribery is never acceptable.
- Risk assessment
Organisations assess the nature and extent of their exposure to risks of bribery. This assessment should be periodic, informed and documented, as well as informing any steps taken in response.
- Due diligence
Organisations apply due diligence procedures to mitigate identified bribery risks.
Ensure that bribery prevention policies and procedures are embedded and understood throughout the organisation
- Monitoring and review
Organisation monitors and reviews procedures making improvements where necessary.
The above principles and related guidance provide a useful starting point for those 54% of SMEs that are not aware of the Act or do not have adequate procedures already in place.
Finally, 96% of those SMEs surveyed by MoJ/BIS who had sought professional advice found the advice that they received useful and good value for money.
Further guidance can also be sought in this month’s related article 'Essential bribery prevention checklist for any business', however if you require further guidance upon the assessment of risk in your organisation and how this can and should be addressed, please contact a member of our Crisis Response team.
Author: Simon TingleThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.