The Crown Prosecution Service have successfully enforced ‘failure to prevent bribery’ legislation, resulting in the corporate conviction of a small interior design company. This guilty verdict sends a clear message that Bribery Act compliance is no longer just best practice.
Organisations will likely recall a flurry of activity following the implementation of the Act in 2011, but for many, compliance with the adequate procedures will have dropped off organisational radars and risk registers.
The commercial offence means that an organisation can be held criminally liable if it fails to prevent an ‘associated person’ from bribing another person, with the intention to obtain or retain business, or any advantage, in the conduct of business for that organisation. Associated persons include anyone who performs services for, or on behalf of the organisation. This can include employees, suppliers, contractors or business partners. An organisation can invoke a statutory defence to an allegation of failure to prevent bribery only if it can demonstrate that it has in place adequate procedures to prevent bribery.
The penalties on conviction are significant, with two directors in the case above being imprisoned, disqualified as directors and ordered to repay thousands of pounds or face extended prison sentences, but far more so is the reputational damage associated with such a conviction.
In our trust in the boardroom publication, we have explored how critical transparency is to ensuring a sustainable, ethical and future proof culture and organisation. Effective mechanisms for preventing bribery have to be a part of this.
Organisations who have only taken initial steps, or haven’t considered Bribery Act compliance thoroughly should:
|①||Nominate a senior compliance officer.|
|②||Review its current anti-bribery procedures for adequacy.|
|③||Complete a bribery risk assessment of staff and operations.|
|④||Regularly communicate its anti-bribery stance throughout the organisation.|
If you would like to talk in more detail about how you should be ensuring effective corporate governance through robust anti-bribery measures please contact Tim Merritt.