Welcome to Corporate Compliance Trends

The need for anti-corruption compliance programs in companies of all sizes in global value chains has never been greater. Since 2006, the U.S. government has settled or prosecuted nearly 300 corruption cases against companies from around the world, including many where the corrupt conduct originated from multinational corporations’ suppliers, vendors, and agents. The average cost of resolving these enforcement actions now tops $80 million.

Beyond the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, new anti-corruption laws with international reach are hitting the books, such as Brazil’s Clean Companies Act, introduced earlier this year. Similarly, many international bodies, including the Organisation for Economic Co-operation and Development (OECD) and the International Chamber of Commerce, have introduced conventions and norms meant to combat bribery of foreign officials. Few doubt that this growing global trend toward rooting corruption out of international business conduct is here to stay.

Still, as a recent study found, the number of global companies with anti-corruption policies has increased by only 1 percent over the past two years, and a sizable minority of these companies have yet to implement even the most basic of compliance programs. Nearly 60 percent of global companies surveyed said they never train third parties despite the fact that many compliance actions have resulted from conduct by agents or intermediaries.

While governments and international organizations set anti-corruption rules and standards, and while law enforcement agencies around the world aggressively pursue potential violations, many companies simply lack sufficient practical knowledge on how to comply with these new global norms. Understanding what effective anti-corruption compliance looks like and how to set up internal compliance programs that mitigate the risk of corruption is an especially daunting challenge for firms operating in emerging and frontier markets, where the Center for International Private Enterprise (CIPE) has worked since 1983 with local partners such as chambers of commerce, business associations, and economic think tanks.

To share our experiences from supporting private sector-focused anti-corruption programs in high-risk countries around the globe, and to help advance international best practices on anti-corruption compliance in these countries, CIPE is launching this new website, Corporate Compliance Trends.

“This effort flows naturally from CIPE’s 30 years of work in the anti-corruption field by building upon the ever growing and interwoven corporate anti-corruption laws with international reach,” said Michael Hershman, a CIPE board member and co-founder of Transparency International, commenting on the new CIPE initiative. “Supporting local firms in emerging markets is the wave of the future in the compliance world,” he added.

The goals of Corporate Compliance Trends are to present and summarize new developments of interest to compliance officers in multinational corporations and local companies alike, showcase examples of effective compliance systems, and analyze country-specific compliance threats. Another goal is to share lessons learned and best practices from CIPE’s ongoing anti-corruption compliance efforts, which include:

  • Training programs in Thailand and Russia for company owners, compliance officers and those who train them.
  • Training CIPE staff and partners to implement programs in Kenya, Pakistan, Ukraine, and Russia that adhere to world compliance standards.
  • Practical tools to help mid-sized firms implement anti-corruption measures, including a soon-to-be-released CIPE handbook on anti-corruption compliance.
  • Convening multinational compliance officers to trade notes and mentor their counterparts at smaller, local firms.

Another aim of Corporate Compliance Trends is to serve as a resource for local firms which want to join global value chains but do not have the expertise and resources to put a compliance program in place. Many of these firms lack a sense of what is demanded by multinationals performing due diligence on potential partners. Even more companies lack the resources to track the twists and turns in compliance enforcement across multiple jurisdictions.

“When applied to third parties in a company’s value chain, the anti-bribery compliance standards laid out in this new enforcement environment become even harder to meet,” said Drago Kos, chairman of the OECD Working Group on Bribery and the host of a recent CIPE discussion on the OECD’s anti-corruption efforts. “CIPE can help companies make sense of this shifting compliance landscape, and reduce the compliance risks in their value chains.”

CIPE’s objective with this site is to convene compliance practitioners, thought leaders and the international development community in the collective support of business-driven solutions to corruption. A leading advocate of this approach is Thomas Fox, the head of a boutique law firm in Houston that focuses on FCPA matters and global anti-corruption compliance and a contributing editor to the FCPA Blog.

Earlier this year, Fox hosted in Houston a delegation of CIPE-supported Russian compliance experts and, in a blog post on his site, described one of the group’s principal takeaways: a company with a compliance program is more competitive. This economic argument is the most powerful weapon in CIPE’s anti-corruption arsenal and one that you will see deployed frequently in Corporate Compliance Trends. Fox put it simply:

companies [in high-risk markets] can make themselves more commercially attractive to do business with if they have anti-corruption programs in place.

As a clearinghouse for information, experience, and learning, the Corporate Compliance Trends blog will be a new resource, both for seasoned practitioners and for those just entering the field. Future posts will examine, among other topics, trends in corporate spending on compliance programs, the release of a report on compliance verification by Transparency International, an interview with an expert observer of China’s ongoing anti-corruption campaign, and a look at CIPE’s anti-corruption programs in Ukraine and Kenya.

John Morrell is a Program Officer for Asia at CIPE. Among other projects, he oversees CIPE support for the Collective Action Coalition Against Corruption in Thailand.