Australian companies caught unprepared for increasing levels of corruption
18 May 2009 – 95 percent of compliance and risk professionals surveyed believe that corruption is more likely to occur in the current economic environment, particularly as organisations look to do business with emerging markets in an attempt to cut costs. This is despite only 12 percent of respondents having full confidence that Australian companies currently comply with
77 percent of survey respondents believe there is now a greater focus on Anti-Corruption as a result of the risks associated with the Global Financial crisis (GFC) such as growing trade relationships with emerging markets that still have a high level of state-owned companies.
According to Richard Butler, Dow Jones Risk and Compliance Solutions specialist, this focus on Anti-Corruption has not been converted to companies taking the necessary actions to ensure they comply with Anti-Corruption legislation.
“As a result of several Federal government initiatives to stimulate the economy, it is likely that this additional funding will also stimulate corruption. While perhaps not intentional, we’re seeing a greater incidence of corrupt practices such as corporate gift-giving that can ultimately influence the decision-making process. This is a very serious issue.”
Almost half (48.5 percent) of the survey respondents indicated that those in senior leadership positions within Australian companies only have minimal knowledge of Anti-Corruption legislation, leaving the door open to the risk of judgment errors. 35 percent of survey respondents believed Board members and senior executives did not supply sufficient resources to combat or prevent corrupt practices.
“Anti-Corruption enforcement needs to come from the top,” said Mr Butler. “Australian senior executives need to realise that Anti-Corruption is a business issue and not just a compliance issue that is relegated to the compliance manager. The reputational and financial cost of non-compliance is far greater than the alternative.”
Acts such as the Crimes Act 1914 , the Criminal Code Act 1995 and the Proceeds of Crime Act 2002 list a number of corruption offences including bribery of a public official, falsifying a document and forgery. In addition,
“While trust needs to be inherent within every company, senior executives cannot rely on ethics alone to stamp out corrupt practices. The backbone of any compliance strategy is sound technology that can deliver the necessary checks to clarify the grey areas that exist around corruption and corporate culture.”
The survey, “Australian Anti-Corruption Compliance Perceptions”, conducted by Dow Jones at the Dow Jones Anti-Corruption Series in
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