Thursday 17 October 2019

Irish business need to do more to combat bribery and corruption, warns report

Stock image
Stock image

Shawn Pogatchnik

Irish businesses face increased legal risks from acts of bribery and corruption committed by employees and third parties and must do more to protect themselves, a Deloitte survey of executives has found.

Deloitte Ireland’s anonymous survey of 106 executives, risk-compliance officers, in-house counsel and other key figures at Irish companies found that too few companies employed modern systems for early identification of bribery and corruption.

Deirdre Carwood, forensic partner at Deloitte Ireland, said the survey results showed that “bribery and corruption is still not well understood in Ireland, despite it being a reality of doing business in both domestic and foreign markets. Embedding this area into risk programmes is now more important than ever”.

Ms Carwood noted that the Criminal Justice (Corruption Offences) Act 2018 created a new offense that opens the door for companies to be found guilty of an offence committed by an employee or third party. “To defend itself against proceedings brought against it, a business will need to prove that it took all reasonable steps and exercised all due diligence to prevent the issue occurring,” she said.

The survey indicated that most companies devoted too little attention or resources to deterring and identifying acts of bribery or corruption affecting their workplace – and, when staff members were caught, this most commonly happened by chance, confession or tip-off, not through systemic safeguards.

Only 15pc of those surveyed at multinationals, SMEs, public sector employers and financial institutions reported known instances of domestic bribery and corruption. Of known acts of corruption, 23pc involved failure to disclose conflicts of interest, 17pc of providing confidential information to an outside party.

While 18pc said acts of bribery and corruption represented a “key risk area”, Ms Carwood said 49pc identified reputational damage “as the key downside to a bribery or corruption-related incident”.

“There is an obvious disconnect here,” she said, calling on employers to commit to detecting risks early using data analytics and internal controls.

“This is key,” she said. “Ongoing monitoring of risky third parties is also very important to identify potential issues before they happen.”

Online Editors

Also in Business