In the video below, PwC Fraud Academy chairman John Tracey is joined by fellow partner Will Kenyon and Robert Barrington of Transparency International to discuss their practical guide to bribery risk assessment which has been produced with our support. It provides specific, practical advice based on real-life experience on how to conduct an effective bribery risk assessment.
John: Hello my name is John Tracey, Chairman of the PwC Fraud Academy. We’re going to be talking today about the recent guidance issued by Transparency International (TI) on assessing bribery risk. I am joined today by Robert Barrington, Executive Director of TI and Will Kenyon, PwC Partner and lead author of the guide. Will, Robert, welcome to you both. Robert I wonder if I could start with you? Why did TI think that this guidance was needed?
Robert: TI is the global anti-corruption in GO. Probably best known for producing indices and research on corruption. We chose for instance, that corruption varies hugely worldwide. For example we published research recently showing that 27% of people in the past year had paid a bribe somewhere in the world. But that varied enormously from 3% in Canada to 75% in Syria Leone. So if you’re a company faced with those risks we thought it would be helpful to give some practical advice on how to navigate through that.
John: And Will, why did PwC want to be associated with this effort?
Will: Well we have a long standing association with TI as an organisation and we’re very proud of that. We were very keen to find a way to actually support what TI is doing. This was a great opportunity because we feel very strongly that risk assessment is absolutely crucial to successful risk mitigation. So, and we had also observed that a lot of our clients were perhaps struggling a little bit with this area. They’re quite good at assessing business risk generally but when it comes to bribery risk some other different kind of risk and perhaps people are a little unsure as to how to handle it. So we wanted something that would be practical and would help them through that process.
John: Robert another question for you if I may. Who would you say the guidance is for? What sort of organisation would benefit from this?
Robert: I think one of the interesting things about the guide is that it’s pitched both at different sizes of organisations, so smaller, medium and larger companies. But also different types of people within the organisation it can be used by the expert perhaps somebody who is very familiar with risk assessment or compliance and does that day-to-day and can drill down to a bit of detail. For example about how bribery risk is different from other types of risk. But also for somebody who may not have done a risk assessment of any type before can use the check lists, the templates and so on and the step- by- step guidance to do that for the first time.
John: OK. I have read the guide there is a lot of fantastic material in it. We can’t do justice to that today, but I wonder for each of you and I will start with you Will. What will be some of the key messages that you think are most important?
Will: Well I think it’s vital to take a structured approach to it. I think the guide contains a sort of ten good practise principles which are an attempt to answer precisely that question. They include things like you know top level commitment and getting management buy-in suitable resourcing for it. A good plan approached through the process focus on inherent risk so gross risk not getting too wrapped up in controls initially. Right the way through to good sound documentation of the process which is absolutely critical because it is a building block, a foundation stone for the wider anti-bribery programme.
John: Robert any additional thoughts from you around the absolutely key messages?
Robert: I think a couple of things. First just to reiterate what Will said in fact that if you want to build the good anti-bribery programme then a good risk assessment is absolutely the place to start and without that you are likely to be much less effective. But secondly, bribery risk can come to a company from slightly unusual places and I think using the kind of approach we suggest you might look a different places in the company for risk that you might not of suspected existed.
John: Yeah, yes and thinking about that very question of risk identification, there seems to be more emphasise in the guide or my reading of it around transactional risk. Why is that?
Robert: We look at several categories of risk including country risk and sectorial risk but focus particularly on transactional risk because in part that is the high level aggregation of lots of different types of risk like gifts and hospitality, interaction with government, sales to government and so on. But partly we had an advisory panel including risk professionals from FTSE100 companies and they felt that this was an area that merited particular attention.
John: Thinking about who might be watching this today, you know organisations that perhaps haven’t done a bribery risk assessment before. What would be one piece of advice you would give to that sort of organisation? Will I wonder if I could ask that first of you and then Robert of you.
Will: Apart from read this guide because it’ll help you. I think my piece of advice would be to go back to basics in terms of asking yourself questions about the way you do business through the anti-bribery lens if you like. Revisit the organisation in that way and focus as I said before on inherent risk so that you are really getting under the skin of your exposures to bribery risk.
John: Robert and you?
Robert: I would say don’t be intimidated. I think when companies are faced with the issue of bribery and bribery risk it can look very complicated. It can look quite intimidating given the level of bribery around the world and the complication of some markets where corruption is prevalent. This I think is a common sense step-by-step approach that will really help you.
John: Very good. Thank you both. You have given us a lot of food for thought and congratulations to both of you. I really do think it’s an excellent document. Thank you for watching, I hope you found this helpful. I do commend the guide to you. But of course if you would like to know more you can reach out to Will Kenyon or Transparency International. Thank you very much.
Bribery and corruption are not just on the agenda of most governments and businesses, they are becoming a top priority. It is fundamental that companies must lead from top as boards and management are responsible for setting strategy and objectives as well as promoting the right culture.
Identifying and evaluating bribery risk is essential to the design and implementation of an effective anti-bribery programme. It's fundamentally a management responsibility, supported by compliance, internal audit and other functions as appropriate.
Law enforcement agencies and regulators around the world have made it clear that bribery risk assessment is the foundation of an anti-bribery programme. In the UK, risk assessment is one of the six principles enshrined in the Ministry of Justice Guidance and is also a focus of the thematic reviews carried out by the Financial Services Authority (FSA) (now the Financial Conduct Authority or FCA).
Furthermore, the Department of Justice (DOJ) and Securities and Exchanges Commission (SEC) in the US have recently published their resource guide.