SOCIAL RESPONSIBILITY ISSUES
A vital aspect of GNH in a good CSR program focuses
on the individual, and that each person in the business, from shareholders
to management and employees, needs to be engaged and empowered equally for
it to be successful.
Corporate Social responsibility is a relatively new
standard used by companies to determine their contribution to society by
recycling part of the profits back into the culture and system. The benchmarks
are now being further enhanced by the Non-Financial Integrated Reporting,
where CSR plays a significant role.
Even though profits may seem generous at the time
when the bribery and corruption crimes are committed, the costs will far
outweigh the benefits, as in the end coordinated law enforcement efforts
will explain the common schemes and compliance misconduct.
FRAUD AND CORRUPTION ISSUES
When companies are caught in Bribery, Fraud and Corruption
acts, in most cases they are forced to pay the biggest corporate fines ever.
Often, these misconducts occur in countries that are in the ‘red zone’
of the corruption perceptionindexand the indictments underline the gravity.
Corruption continues to be prevalent in many countries.
This is a serious problem because in the long term it hinders the corporate
and business development. Corruption is a complex social, political and
financial situation that affects many countries. Corruption undermines democratic
institutions slows economic growth and contributes to corporate and governmental
SEC and EU fines have skyrocketed in recent years:
from 1995 to 1999, cartel fines totaled 271 million euro ($366 million);
in the next five years, to 2004, they jumped to 3.2 billion euro ($4.3 billion).
And in the last five years ending they tripled over those previous five
years to 9.8 billion euro ($13.3 billion). The Securities and Exchange Commission
filed a record 735 enforcement actions in 2011 and collected $2.8 billion
in settlements.Top 20 SEC settlements for the fiscal year make up $969.2
million of that total.
RISK MANAGEMENT AND COMPLIANCE ISSUES
GRC allows companies to integrate and manage the processes
and operations that are subject to regulation, hard or soft law and integrate
and manage the core GRC functions into a single integrated set of processes
Globalisation of businesses has intensified the focus
on particular GRC issues including, Bribery Fraud and Corruption (BFC) and
CSR. Yet the processes and principles on which business activity is based
have not been updated for over a generation. It is time to upgrade the GRC/CSR/BFC
controls so that the corporate monitoring and reporting aligned alongside
businesses processes to help foster the conditions GRC maturity.
GRC policies and procedures that set the standard
for sustainable and properconduct by defining boundaries for the staff and
management behavior.When discipline and controls are lacking an organization
fails to establish and implement policies, the company rapidly changes into
a problem area that no tone-at-the-top can determine.
Continued corporate growth has meant that it has been
necessary to contract with third parties to ensure your firm is able to
service its clients appropriately. The key third parties arrangements include,
platform providers, HR, IT services - including data storage and IT security
- and research houses.
The Danish and the EU audit industry are confronted
with continued massive pressure on many fronts. The most recent event is
the upheaval caused by the sudden and surprising merger of KPMG's Danish
activities in E & Y.
The final text will be approved in April 2014, and
will include elements that increases or reinstates management, stakeholders
and investors’ confidence and create a competitiveaudit framework for
E&Y in Denmark was on the verge of being destroyed,
the local partners then formed what is interpreted by most as an unholy
alliance with KPMG's local Danish branch. Did E&Y manage to attract more
than what it had lost? Is the price for survival too high? Has the natural
balance and the pecking order in the audit field resorted? Was the merger
with the arch enemy the only option? Have the audit companies actually understood
what Corporate Governance, Ethics and Compliance is all about? These and
other entertaining questions will be in focus in the next newsletter.