Executives worry about corruption risks: survey
WASHINGTON (Reuters) - U.S. companies face huge challenges in detecting or preventing corruption even as the government steps up enforcement of anti-bribery laws, a new survey by management consultant group Deloitte LLP shows.
Ninety percent of 276 business executives surveyed by Deloitte in early 2011 said their companies had some anti-corruption policy covering bribes and gifts to government officials, but only 29 percent said they were very confident that the programs would prevent or detect corrupt activities.
"It's time for all companies to get their anti-corruption houses in order," said Bill Pollard, who works in Deloitte's anti-corruption consulting practice.
The survey, he said, raised questions about how robust U.S. corporate "compliance" programs were, or whether they were just "paper programs" as many U.S. government officials suspected.
Attorneys and consultants specializing in anti-corruption work have seen demand grow rapidly in recent years, given stepped up enforcement of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, which took effect July 1, and new U.S. rules offering cash rewards to whistle-blowers.
"There's a lot of money in it," Pollard said.
He said the Deloitte survey revealed big gaps in the maturity of compliance programs between large companies with revenue of more than $1 billion, and smaller companies.
Among smaller companies, 23 percent had no written policy on corruption, versus 6 percent for larger businesses.
More than one-third of smaller companies did not conduct internal audits of each of their foreign operations, the study showed. That compares with 13 percent for larger companies.
Pollard said the gap was troubling, given that smaller companies were just as active in emerging markets such as China, India, Russia and Brazil, where corruption risks are high.
The survey also underscored concerns about the use of third parties to help broker deals overseas, a practice identified by 52 percent of executives as the greatest corruption risk.
Despite such concerns, one-quarter of executives said their companies did no due diligence on third parties, and only 9 percent conducted detailed monitoring to ensure compliance by third parties with the company's anti-corruption programs.
Technology existed to help companies monitor emails, data and payments to ferret out bribes, but only one-quarter of executives told Deloitte their companies used such software.
(Reporting by Andrea Shalal-Esa, editing by Maureen Bavdek)
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