Douglas Allen, Ethisphere Data Services
Kroll has once again partnered with Ethisphere to measure the state of Anti-Bribery and Corruption as part of its 2017 benchmarking study. As we continue to gather the data, here’s a brief snapshot of emerging trends and insights we’ve received. If you’d like to participate in this survey and receive your exclusive digital copy of the report, click here.
Similar to our findings last year, over half of the respondents to date feel their organization’s bribery and corruption risk will remain consistent throughout 2017. Yet more than one-third of respondents believe their organization’s bribery and corruption risk will increase in 2017—and what is the most cited reason for this? We’ve seen a spike in the number of third-party engagements and increased enforcement of existing relationships.
A handful of individuals (less than 10 percent) that believe their bribery and corruption risk will decrease this year attribute this decline largely to robust investments in policies, training, and third-party due diligence.
Perceived Resource Constraints Result in Higher Perceived Levels of Liability
Do you believe you have enough resources to support your organization’s anti-corruption efforts? Half of respondents to date believe they do not have enough resources to support their organization’s anti-corruption efforts.
Moreover, participants that do not have enough resources reported that they are more concerned with organizational bribery and corruption liability for 2017. Those perceived to be under-resourced indicated that they are concerned about their own personal liability related to bribery and corruption for 2017 relative to last year.
Concern Over Third Party Corruption and Reputation Risk is Ahead of Cyber Risks
Our respondents report bribery and corruption risk, reputation risk, and cyber risk as the current top three most concerning potential risk areas when dealing with third parties. Nearly nine out of ten respondents so far are either very concerned or somewhat concerned with each potential risk associated with their third parties.
However, when measuring severity of potential risks associated with third parties, nearly 60 percent of respondents indicated being “very concerned” over bribery and corruption as well as reputation risks, yet only 40 percent displayed a similar level of concern over third party cyber risk.
This difference in perceived severity correlates with how respondents employ the help of outside vendors in conducting various types of due diligence. Just over one-third of respondents indicate using an outside vendor to conduct due diligence to help assess cyber risk, compared to three-quarters of respondents that get help for bribery and corruption risks.
Third-Party Issues Identified After Due Diligence are Common and Often Attributed to Failure in Process
More than half of respondents have experienced a compliance issue involving a third party after due diligence was conducted. When asked how the issue with a third party was identified, half of individuals surveyed indicated the issue arose out of ongoing monitoring efforts, while 28 percent indicated the issue came to light following regulatory enforcement effort.
Why did these respondents believe that the due diligence process failed to identify the issue? Among the most common responses is a failure in the due diligence process –the assessment conducted did not return the relevant risk information.
Join the Conversation
Interested in finding out where your organization’s anti-corruption efforts stand? Join the conversation and fill out our 2017 questionnaire to ensure you receive a copy of the benchmarking report as soon as it becomes available this March. Click here.
Interested in receiving the report sooner and connecting with some of the brightest minds in the field? Join us on March 15-16th for our 9th Annual Global Ethics Summit. Register now!