The 5 Top Tactics on Avoiding the Bribery Act Pitfall
The Bribery Act 2010 is due to come into force on 1 July 2011 and whilst the majority of the Act will apply to corporate processes, the Guidance issued by the Ministry of Justice states there will need to be input to this process by HR professionals. The aim of the Act is to provide a fair, competitive business environment, allowing firms to take a common sense approach.
It will be an offence for an individual to offer, promise or give a bribe and it will also be an offence to request, agree to receive or accept a bribe. Importantly for companies though, a business may be found liable for failing to prevent a person associated with the organisation from bribing another person on its behalf.
To reinforce the seriousness of the legislation the Government has prescribed heavy penalties for those found guilty of an offence under the Act including a term of imprisonment not exceeding 10 years and an unlimited fine.
The Guidance suggests the overriding principle is the implementation of reasonable and proportionate systems to avoid committing an offence. However the Government fails to define what this means. It is therefore going to be important for organisations to ensure their employees fully comply with the Act and the following principles should be followed in order to avoid a knock at the door by the Serious Fraud Office.
1. Guidelines for employees
Starting off, companies are advised to issue guidance to all employees on the company's and their individual responsibility for complying with the Act. This could include a clear Code of Conduct for complying with the Act , backed up with regular training. The Third Principle of the Guidance expects organisations to undertake risk assessments of its exposure to potential external and internal risks of bribery; clearly employees will need to know how to look for risks and what they should do if suspicions arise.
2. Top-level involvement
The management of an organisation need to promote a culture within a company in which bribery is never acceptable. Clear statements from those who run or control an organisation will be very effective in developing compliance and should not be delegated. This may include a clear Statement of Values however it could take a variety of forms depending on the organisation's size, management structure and circumstances. The response should be appropriate and proportionate - in a large organisation it will need input from the board of directors, smaller organisations may require top-level managers to be personally involved.
3. Recruitment - additional checks?
Depending on the size of the organisation it may be reasonable and proportionate to amend recruitment policies and procedures in order to gain a better picture of an individual's financial situation and make an assessment of whether there will be a risk of bribery. This could include bankruptcy checks, additional references and Criminal Records Bureau checks.
4. Clear reporting and disciplinary procedure
Organisations will need to amend employee contracts and handbooks to ensure a clear signal is sent to employees that failing to comply with the Act and company procedure will be considered gross misconduct and may result in dismissal. It will also be necessary to ensure that employees feel comfortable in reporting suspicions to management and will not face hostility from mangers or fellow employees. A confidential procedure should be implemented for this purpose encouraging employees to use their training and knowledge to report concerns.
5. Monitoring and review
As the business environment changes all the time, so too does the scope for bribery. Procedures, training, Codes and Guidance should not be rigid, but allow for change and should be effectively communicated to all employees and persons associated with an organisation when changes occur. It will also be valuable to accept input or feedback from employees in order to keep the compliance mindset alive.
Overall, it should be remembered that the Act is there to help businesses compete fairly with each other and in taking simple steps outlined above the aim of the Act should be achieved. The Principles in the Guidance are said to be flexible allowing for the huge variety of circumstances that commercial organisations find themselves in.
For more information on the above or how to implement the Act into your organisation, or for advice on any other employment issue please contact our employment department on 020 7354 3000 or e-mail employment@colmancoyle.com
Author Profile: Georgina Kyriacou
Date published: 12th May 2011