Is an Anti-Bribery and Corruption (ABC) Policy Needed?

The UK Bribery Act 2010 stipulates an offence of failing to prevent bribery, thereby necessitating organisations to establish robust anti-corruption procedures. The failure to do so can result in prosecution and significant financial penalties. Hence, an anti-bribery and corruption policy is crucial for all organisations, regardless of size, if there exists any potential risk of bribery or corruption for any individuals associated with the organisation.

This requirement pertains to all organisations, whether large or small. If the entity is incorporated or established in the UK, or if it conducts business or part of a business in the UK, it falls within the ambit of the Act. Comparable procedures are commonplace in numerous European and international jurisdictions.

The Act does not explicitly define what constitutes ‘adequate procedures’, and so each organisation must determine its own measures. Nonetheless, the creation and implementation of an anti-bribery and corruption policy could potentially mitigate the offence for many organisations.

Why develop a Policy?

An anti-bribery and corruption policy exists to articulate a firm’s principles, beliefs and attitude concerning bribery and corruption. It serves as the organisation’s comprehensive set of guidelines that delineate its stance, strategy and measures for addressing bribery and corruption, both within its ranks and in all interactions with external entities.

More than merely a rulebook, an effective policy should provide employees with an understanding of the policy’s rationale, its application to their respective roles, and serve as a reference for day-to-day operations. All anti-bribery and corruption strategies and procedures included in a policy ought to be clear, feasible, readily available and enforceable.

How to develop a policy

Firstly, it should be noted that the obligation for the creation of a policy falls to the CEO, the board of directors, or the highest-ranking individual within the organisation to appoint a person or group tasked with the formulation, publication and application of the firm’s anti-bribery policy. In sizeable businesses, this role typically belongs to the Chief Compliance Officer, and the consultation of a legal advisor could be essential to guarantee complete adherence to regulations. Understanding the importance of honesty and ethical dealings in business cannot be overstated. An ABC policy reinforces these values, offering guidance on acceptable conduct and expectations. The formulation of a comprehensive policy is very likely to follow the four steps set out here:

1. Analyse the company’s risk profile. This assessment should identify areas within the specific business where bribery and corruption might occur. Once identified, these risks should be ranked and mitigation strategies developed.

2. Define clear standards A good ABC policy should detail what constitutes bribery and corruption, particularly within the specific industry and company’s working environment. The policy should clarify that the company does not accept, offer or tolerate bribery in any form.

3. Ensure the policy outlines the consequences of breach This could include disciplinary action, termination of employment, or even legal ramifications. This sets the tone that unethical conduct will not be tolerated.

4. Provide training and support For the policy to be effective, it must be understood. Regular training sessions and accessible resources help employees grasp and implement the policy.

Remember, the goal is a culture of integrity, where unethical behaviours are not only prohibited, but unthought-of. A well-crafted ABC policy is pivotal in fostering such an environment.

What should the policy include?

The intricacy and content of ABC policies will differ based on each organisation’s ascertained risk exposure. Therefore, the policy should always be commensurate with the activities and level of risk of the organisation. The aim of an anti-bribery and corruption policy is to stave off bribery and corruption by maintaining sufficient procedures to observe and pinpoint where and when it could transpire. The policy should consider the roles of the entire workforce, from the owners or board of directors to all employees, and all individuals and entities under the organisation’s control. There will, of course, be differences between organisations, however it is very likely to include most of the following essential components in some form or another:

  • A definitive statement outlawing any form of bribery or corruption.
  • A statement of commitment to counter bribery in all parts of the organisation’s operation from the senior management, to reflect the top-level commitment against bribery and corruption in the organisation.
  • The purpose of the policy – That it is intended to help employees to recognise and deal with bribery and corruption issues, as well as to understand their responsibilities.
  • The scope of the policy – Who the policy applies to, for example Officers, Trustees, Board, and/or Committee members at any level, all employees, third parties, etc.
  • A declaration detailing the company’s strategy for mitigating and averting bribery risks.
  • Key roles – Specifically who is responsible for policy ownership, review, implementation, first point of contact for advice and for those raising a concern, etc.
  • Unambiguous explanations of what ‘bribery and corruption’ and all other related terms imply in the legal context. This would probably include the legislative context, indicating which laws and regulations apply.
  • A statement concerning third parties, indicating that all partners in joint ventures, contractors, suppliers, distributors, agents and other third party representatives associated with the company are expected to adhere to its ABC policy.
  • Procedure for non-compliance to the policy, including a link to a grievance and discipline policy.
  • Implementation/communication – How the policy is implemented and communicated, such as training given, part of performance reviews, etc., where it is available such as the organisation’s website, employee’s handbook, etc.

Guidelines should also be provided for the actions taken to ensure the proper conduct of business, focused on specifics relevant to the organisation and applications in particular operational risk areas. These are likely to include, amongst others:

  • Guidelines for preventing or resolving conflicts of interest.
  • Explicit rules regarding the acceptance of gifts, hospitality, donations and the like.
  • Clear policy statement on facilitation payments.
  • Record-keeping and auditing.
  • Procedures for reporting observed and suspected violations.
  • A policy to protect whistleblowers.

Drawing it together

An Anti-Bribery and Corruption policy is not a mere formality but a crucial tool for safeguarding an organisation’s integrity. It helps to communicate clear standards on acceptable conduct, fortifying a culture of ethical behaviour. To develop this policy, understand the company’s risk profile, define clear standards, outline consequences and invest in training. The policy should include clear definitions of bribery and corruption, procedures for reporting violations, and guidelines for appropriate conduct. Its benefits are manifold: it helps to prevent legal repercussions, protect the company’s reputation, and fosters an environment of trust and transparency. Ultimately, an effective ABC policy is an investment in your company’s long-term success and its sustainability.