Ethics, compliance and consumer goods

Bribery and corruption are an international, significant menace within the world of modern business. ISO 37001 is a guidance publication from the International Organisation of Standardisation (ISO) specifically aimed at helping businesses and institutions combat the insidious threat of bribery. Internally devised ethical charters lack the necessary efficacy to be relied upon alone. Universal external standards are essential for robust mechanisms of prevention to succeed in the global age.

According to Transparency International, 1 in 4 people around the world said that they paid a bribe when accessing public services in the 12 months prior to being surveyed. Illicit financial flows, like corruption, bribery, theft and tax evasion, cost developing countries $1.26 trillion per year. The same figure could be used to lift the 1.4 billion people living on less than $1.25 per day over this threshold for six years. Bribery and corruption are far from trivial. They damage the global economy, they undermine systems of fairness, and they degrade trust in public institutions.

‘ISO 37001, Anti-bribery management systems’ sets out a framework through which organisations can prevent, detect, and effectively address bribery in all its forms. After two and half years of careful review, the result was published in 2016 and is now gaining traction among organisations serious about reshaping the world of business.

Fernando Cevallos, forensic services partner at Deloitte, believes that ISO 37001 is an international tool that will assist organizations and demonstrate their commitment to fighting bribery.

“People are tired of suffering bribes and absorbing those costs…We all foot the bill, so now is the time to make a difference. Adopting the standard will not stop organizations from ever doing it, but it will make people think twice before promising, soliciting, offering, giving or receiving bribes,” he said.

Many companies in recent years have devised internal ethical charters, but while these were a step in the right direction, they have been demonstrably ineffective. In just the last few years we have seen high profile cases come to public attention in which companies have been convicted of serious crimes relating to bribery and corruption.

Senior staff at the engineering firm Alstom were convicted of crimes relating to bribery in an effort to secure contracts at Lithuania power plant. A director of a subsidiary was charged and the company’s reputation and position came under severe scrutiny. By pursuing and securing ISO 37001 certification, the company has been able to rebuild its image within the business world and has been able to demonstrate that it is doing the maximum possible to eradicate exposed cultures of corruption and prevent their re-emergence.

Other companies who have had close calls in these matters before took also steps to strengthen their processes by acquiring ISO 37001 certification. An example is the state-owned defence group, Leonardo, which was investigated for bribery concerns relating to Indian helicopter contracts. Eventually, the company was cleared of wrong doing due to insufficient proof, however Leonardo still chose to pursue ISO 37001 anti-bribery certification to make sure that there would not be question marks hanging beside its name in the future.

For such companies, building on and improving internal processes by bringing them in line with ISO guidelines has a powerful effect. One of the main ways in which it is useful is through bringing different business silos together, for instance legal with management, so that a global perspective is deployed when implementing preventative measures. It also sets out clear roles for boards and management. Additionally, as the audits are external through certification bodies, the review is trusted as a disinterested assessment.

Looking at the bigger picture, a universal standard by which companies measure their anti-corruption systems allows a high bar to be set around the world, one that is not dependent on a given national legal system. It also fosters an international culture of ethics and compliance that will bring business and society forward. With powerful companies like Microsoft taking on certification, the ISO-led anti-bribery movement is gaining momentum.

David Howard, the corporate vice president and deputy general counsel at Microsoft for litigation, competition law and compliance, encouraged other companies to pursue ISO certification. “We think a consistent approach to anti-corruption programs is a good thing. That, along with an objective and independent certification process, should give governments around the world confidence that the companies which achieve certification are doing everything they reasonably can to reduce corruption,” he said.

Being developed by a global expert stakeholder, the ISO 37001 is free from national or industry specific expectations and interests. It is, therefore, the most impartial and sound method for preventing bribery and corruption available. Companies adopting the framework and certification have seen their standing rise as a result, and with this comes the competitive advantage of being branded a champion of clean, ethical business practices, the so-called ethics premium.

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