REUTERS | An aerial view of tulip fields near the city of Creil, Netherlands April 18, 2019. REUTERS/Yves Herman

To mitigate threats, GCs need to focus on corruption risk as offices reopen

It can be easy for corruption risk to be put on a back burner as workplaces reopen and organisations get back to business at least partially onsite. A year of slow, or no, growth can pressure everyone from the top down of an organisation to focus purely on accounts receivable. But a wise General Counsel (GC) would keep a keen eye on corruption risk as elements of a still-dispersed workforce could be tempted to make the wrong choice.

Distracted by return-to-work issues and COVID-19 pandemic risks, GCs have a lot on their plates right now. For example:

  • Office lease issues to contend with as organisations downsize their real estate holdings.
  • Supply chain problems that in-place contracts may not solve.
  • An overall shift to the rhythm of a workday that had been disrupted by 18 months of global upheaval.

Meanwhile, the rank-and-file, as well as managers and executives, are likely to be feeling pressured to make up for lost time and money given our collective pandemic shutdown or slowdown, depending on what your business happens to be. In short, everyone is both busy and under pressure; and that’s a scenario that might give rise to corruption that could go undetected.

A time for precaution

We have, after all, seen seemingly good people do bad things in previous challenging times. For example, there were several top-flight entities that got into hot water during the Great Recession and its years-long aftermath. Pressured to make their numbers, even people working for marquee-branded organisations can be swayed by high-net-worth clients and pressure to perform.

With people focusing on the bottom line, red flags can be ignored, compliance might be circumvented, and corrupt behaviour can go undetected or wilfully disregarded if the money keeps coming in. If a GC doesn’t notice it, a regulatory or enforcement agency might. At the same time, with many employees still working from home and organisations’ compliance functions having to, in essence, police multiple fronts, more bread-and-butter opportunists may use this moment of lax oversight to do things they shouldn’t.

Just this year, the U.S. Securities and Exchange Commission charged a couple with insider trading in a situation where one partner was a product manager at a drug company overseeing a clinical drug trial. After learning of negative results, the partner gave a tip to her companion, who sold his shares. Although the sale pre-dates the COVID-19 pandemic, it’s a good reminder that an uncomfortable bleed of confidential information might be oozing its way outside a company as employees and their partners work within the confines of their home.

Double-down on risk management

As busy as they are, GCs need to greet their organisation’s office reopening with increased vigilance regarding risk management.

Update policies and procedures to reflect current circumstances

If you want your workforce to follow policies and procedures, revise them so that they reflect the new normal. How should things be handled when people are working remotely, and managers are not necessarily immediately accessible?

Add training with contemporary elements

Similarly, the training provided to employees shouldn’t be years-old courses that describe a different world. Workers need to know how to comply with policies and procedures in their current circumstances, so make sure the training your organisation offers is useful. To that end, given the stress many employees are under, push out frequent micro-trainings and quick and easy reminders. For example:

  • What are bribery and corruption?
  • How might they surface?
  • Where should you report them?
  • How can you avoid them?

Just a sentence or two in a daily newsletter can suffice to help keep anti-corruption top of mind. Pose moral dilemmas: Your biggest customer now wants a kickback to keep the company’s business. What would you do? Where would you go for help?

Engage with gamification

Gamification can make compliance reminders fun too. Setting up competitions between internal teams can motivate people to pay more attention to what otherwise may seem repetitive. Similarly, individuals who are given the opportunity to earn scores in training may engage more intently with the content.

Appraise compliance performance

As circumstances and employment laws allow, consider adding compliance elements to performance appraisals (thus rewarding compliance, as well as results). The reality is that someone who is going down the wrong path, compliance-wise, sees more value in the ends than in the means. Make it harder for them to make that decision.

Gather and use pertinent data

Would you even know if ten people on a particular team looked up the anti-bribery and anti-corruption chapter of your organisation’s Code of Business Conduct last week? That could be an indicator that something is amiss and that someone should check on it. Develop that level of fact-gathering ability and make use of it.

Sure, some of these suggestions take time and money that are likely in precious short supply right now. But these proactive measures are meant to forestall hefty legal fees, the distraction of an investigation and regulators’ fines down the line. GCs would be wise to heed these suggestions.

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