Integrity is the Essence of Everything Successful
R. Buckminster Fuller
What is Compliance
Any commercial activity is basically the process of making money. In pursuit of high profits, many businesses sometimes decide to circumvent laws and neglect ethical norms. However, such behavior has a negative effect. Instead of high earnings, businesses receive heavy fines, a ban on doing business, negative public outcry, criminal prosecution, and other consequences. The result is a loss of reputation, a decline in revenue, imprisonment, mass layoffs, and even bankruptcy. For example, the total amount of fines imposed by the US Department of Justice and the Securities and Exchange Commission for bribery violations by various companies around the world from 2010 to 2019 was more than $ 17.5 billion. So the anti-corruption compliance is basically a set of legal and organizational measures implemented by an organization aimed at complying with the requirements of anti-corruption legislation and preventing its violations. The implementation of such a program in the company helps to minimize business risks: prevent corruption offenses and avoid negative consequences for the organization and its officials, including criminal prosecution.
Principles of Developing an Effective Compliance Program
- Compliance of policies with applicalbe legilsation
- Right tone from the top from the management
- Active involvement of employees
- Continuous control and regular monitoring
- Regular risk assessments
- Testing of the compliance program
- Sufficient compliance resources
- Inevitability of punishment for violations
- Business transparency
- Collective compliance initiatives
- Strong and regular training program
- Effective policies, procedures and controls
Popular Compliance Terminology
Compliance
A set of legal and organizational measures aimed at complying with the requirements of legislation and preventing its violation.
Compliance Risk
Exposure to legal penalties, financial forfeiture and material loss an organization faces when it fails to act in accordance with laws and regulations, internal policies, and ethical principles.
Internal controls
Mechanisms, rules, and procedures implemented by a company to ensure the fullfilment of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws and internal policies.
Code of conduct
A document that conveys organizational values, a commitment to standards, and a set of ideals. In practice, used interchangeably with Code of ethics.
Economic Sanctions
Commercial, financial and other measures applied by one or more countries against a targeted self-governing state, group, or individual.
FCPA
US Federal Law enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.
Whistleblower
A person who informs on a person or organization regarded as engaging in an unlawful or immoral activity.
Export Controls
Laws and regulations that prohibit the unlicensed export of certain goods for reasons of national security or protections of trade.
Bribe
Offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person in charge of a public or legal duty.
Conflict of Interest
A situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity (conflict between private interests and official responsibilities).
Integrity
Making choices that are consistent with each other and with the stated and operative values one espouses. Striving for ethical congruence in one's decisions.
SOX
The US Sarbanes-Oxley Act of 2002 protecting shareholders and the general public from accounting errors and fraudulent practices in enterprises, and to improve the accuracy of corporate disclosures.