How to Achieve Disclosure Consistency in Bribery, Fraud, Corruption (BFC) and CSR Reporting.
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 instability.
New reporting requirements
With increased demand for transparency and greater corporate social responsibility, the new EU directive will require that companies report on exactly what policies, processes and procedures they have in place that prevents corruption.
The EU Commission has recently presented the new accounting directive to address these issues. The anti-corruption component of the directive is that companies must report on their corporate social responsibility - including their activities to combat corruption. The regulation is expected to be finalized in the spring of 2014.
The change is that previously, companies only reported on their environmental conditions, however with the new adoption of the new directive it will be for the first time that the reporting requirement must also contain material anti - corruption activities introduced by global companies.
Structured methodology to benchmark your anti- corruption program
Compliance to the FCPA and UK Bribery Act often mean different things to different people. However non-compliance to FCPA and UK Bribery Act and related international mandates means that dreadful things happen-even to good companies-the results can often look depressingly similar, with large fines, damaging press coverage and an awful hit to the company brand. The list of highly reputed companies that have got themselves in this mess is increasing.
Previously, disclosures were often prepared by the marketing department, with platitudes and expensive idealistic wishful-thinking programs. This time such disclosures are a thing of the past because both the U.S. FCPA (1977) and the English Bribery Act has global jurisdiction and is fairly comprehensive in its scope. Therefore, corporate entities must allow for proper and structured introduction in building an effective compliance program to fight corruption, both within their own organization and among business partners and third parties.
From Visibility to Creation of Values
We can also look into the additional disclosures and reports requirements on environmental, social and employee-related issues, concerns regarding respect for human rights, CSR and many other 'soft law' components, can be under the auspices of the United Nations Global Compact, the Global Reporting Initiative (GRI).
To support the new trend of accountability and transparency we recommend that there is a disclosure uniformity that include those concrete results achieved by the implemented/related good governance, risk management and compliance (GRC) policies and demonstrate how the company manages these risks, associated with all of the above components. The above-mentioned compliance reporting structure will also ensure that the GRC process later on can be automated.
The primary purpose of compliance is to create value, if the GRC actions are made more transparent. Instead of regarding the new reporting requirements as a single one-off, non-renewable initiative, we recommend that companies take a more holistic GRC approach. We often see that a controlled GRC method provides the right answer, solution and the opportunity to achieve far greater compliance and understanding. Visibility also provides the capability so that all corporate managers and employees take anti-corruption GRC agenda seriously. Thereby the established zero -tolerance practice makes sense and does not simply act as a golden rule.
Copenhagen Compliance provides advisory and consultancy to upgrade your anti-corruption efforts, policies, procedures and processes so that they are non-compromising, relevant, material and direct. We can update the insights, best practice and provide you with the need to know information, to raise awareness of bribery and corruption issues and provide guidance on the company role and leadership by the officers in combating and preventing bribery and corruption.
The EU directive applies to companies with more than 500 employees and either a balance of 20 million € or net revenues of 40 million €. A total of approx. 16,000 businesses at EU level will be affected by this EU directive.
