The record number of enforcement actions taken by the U.S. Securities and Exchange Commission is proof that corruption, fraud and other misconduct remain legitimate problems for many companies globally. Vigorous enforcement, which today involves the use of sophisticated technology and data analytics tools to generate cases, produced a record 807 enforcement actions and roughly $4.2 billion in sanctions in 2015.
The scope of the problem is evident, according to the 2016 AlixPartners Global Anti-Corruption Survey, which polled general counsel and compliance officers at companies representing more than 20 major industries in the United States, Europe and Asia. The survey explored the impact of corruption risk on the global business environment, measured the impact of anti-corruption laws and regulations on compliance-related activities, and assessed the ways companies are preventing, identifying and handling corruption risk.
The toll on business:
- 23 percent of respondents said their companies lost business during the previous 12 months as a result of situations involving illicit payments to government officials, compared with 22 percent in our 2015 survey
- 32 percent said they have ceased doing business with certain partners because of corruption risk, compared with 28 percent last year
- 36 percent said their companies pulled out of or delayed acquisitions because of potential corruption risk, compared with 26 percent last year
- 64 percent said they have not avoided doing business in a region based on possible corruption risk, compared with 66 percent last year
A problem that spans many industries and geographies:
- 90 percent of respondents said their industries are exposed to corruption risk, compared with 85 percent in our 2015 survey, with 28 percent citing “significant risk”—up from 22 percent last year
- 78 percent and 68 percent of respondents rated risk levels as significant for Africa and the Middle East, respectively, compared with 59 percent and 48 percent in 2015—a sharp increase for both regions
- 73 percent of respondents indicated significant levels of risk in Russia, compared with 75 percent in last year’s survey
For a majority of inside counsel and compliance officers, enforcement efforts are making an impact:
- 75 percent of respondents said their companies have dedicated anti-corruption programs
- 67 percent said they had reviewed policies in the past year
- 51 percent said they had implemented anti-corruption programs in the past 10 years
- 66 percent have whistle-blower hotlines; 27 percent have received tips related to corruption during the past 12 months
Anti-corruption efforts: What’s working? And what are the challenges?
- 75 percent said variations of policies by country are the main obstacles to combating corruption; also cited were inadequate staffing (69 percent) and a lower priority on compliance (64 percent), compared with business objectives
- 85 percent cited internal audits as the most effective means of reducing risk; also cited were compliance policies (85 percent), training (82 percent), and increased scrutiny of books and records or internal controls (80 percent)
Data issues rising in cross-border investigations:
- 77 percent said their companies face challenges in navigating local data protection laws
- 76 percent characterized ensuring the security of their data as “challenging”
- 27 percent said they expect an increase in challenges associated with moving data across country borders
See more at:
 US Securities and Exchange Commission press release, October 22, 2015, https://www.sec.gov/news/pressrelease/2015-245.html. -
Published July 4, 2016.