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Identifying a threat ahead and not preparing for it is the ultimate sign of inefficient and, some might say, ignorant risk management. A good example of that can be found in the recent 2013 Anti-Bribery and Corruption Report from Kroll and Compliance Week that says 47% of global corporations take no steps to train their third parties and business partners on anti-bribery and corruption efforts, despite expectations by 50% of respondents that their companies’ bribery and corruptions risks will increase in the next 12 to 18 months. Hard to believe? That’s what Lonnie Keene, managing director for Kroll Advisory Solutions, which co-produced the study, thought too. “Take a look at any recent enforcement action in the United States about bribery,” he said. “They always involve a third party, and regulators have been clear that they expect corporate compliance departments’ anti-corruption efforts to include third parties as well. We should not be seeing numbers like this.” Given that enforcement actions by governments on behalf of the Foreign Corrupt Practices Act can routinely run in the tens of millions of dollars in fines and penalties, it would be wise for companies of all sizes to make sure that every one of their business partners understand the risks.
Emily Holbrook is the founder of Red Label Writing, LLC, a writing, editing and content strategy firm catering to insurance and risk management businesses and publications, and a former editor of Risk Management.