In AlixPartners fifth annual global anticorruption survey, we polled more than 300 general counsel and compliance officers on the impact that corruption risk has on their businesses. Our report explores the challenges facing corporate legal departments today, and why technology and data analysis continue to play important roles in managing risk.
Key Highlights
- 93 percent of survey respondents say they expect the challenges associated with moving data across borders to increase or stay the same.
- 37 percent say their companies pulled out of or delayed an acquisition because of corruption risk.
- 31 percent say their companies have lost business during the past 12 months because of a government bribery problem – an 8 percent uptick from 2016.
- 42 percent of respondents say their companies stopped working with business partners because of corruption risk – up from 32 percent in 2016.
The Risks Persist
No countries or regions are free from corruption, but in-house counsel and compliance officers say certain regions are especially vulnerable. About 76 percent of survey respondents say doing business in high-risk regions is one of their biggest challenges.
- 67 percent say there are locations where it is impossible to avoid corrupt business practices – namely, Russia (35 percent), Africa (33 percent) and China (27 percent).
- 81 percent say corruption laws in Africa are ineffective.
- 73 percent say the same about laws in Russia.
The Role of Data
Data continues to play a critical role for companies in their efforts to investigate issues related to corruption and monitor suspicious activity.
- 67 percent of respondents say their companies use real-time monitoring for suspicious activity or behavior.
- 87 percent believe their companies are successful in using data to identify possible corruption.
- 86 percent say their industries are exposed to corruption risk, compared with 90 percent in 2016; of these respondents, 27 percent and 28 percent described this risk as “significant” in 2017 and 2016, respectively.
What Is Working and What Is Not?
Within corporate legal departments, internal audits and data analysis are reducing risk, but inadequate IT systems and the heavy volume of information that compliance officers must process present obstacles.
- 84 percent of respondents say they have reduced risk by performing internal audits.
- 87 percent report that their companies are successful in using data to identify possible corruption.
- 79 percent say the biggest obstacle to tackling corruption is the massive amount of information they must contend with.
- 73 percent say insufficient IT systems pose challenges to their ability to address risk.
- 54 percent say local data protection laws are impediments to collecting and analyzing data.
Harvey Kelly is a managing director at AlixPartners LLP and global head of the investigations, disputes and risk practice. He has more than 30 years of experience as a forensic accountant, specializing in corporate investigations, financial accounting and reporting, litigation consulting and auditing. He can be reached at [email protected].
Tarek Ghalayini is an AlixPartners LLP managing director. A licensed attorney with a background in accounting and finance, he also works closely with counsel, corporate clients and financial advisors on complex electronic data problems in litigations, financial investigations and restructuring matters. He can be reached at [email protected].
Diane Hughes, a managing director in AlixPartners LLP’s London office, advises lawyers and other stakeholders involved in forensic investigations. She brings more than 30 years of experience in professional services across a wide range of industries. She can be reached at [email protected].
Published August 3, 2017.
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