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Anti-bribery and anti-corruption

Your expert for questions

Arndt Engelmann ist Ihr Experte für Anti-Bribery und Anti-Corruption bei PwC Deutschland

Arndt Engelmann
Partner, Forensic Services at PwC Germany
Tel.: +49 89 5790-5850
Email

How to fight bribery and corruption in your company

Fraudulent activity by employees in the form of bribery or corruption can put a company’s operations in a difficult position, significantly damage its reputation and jeopardise its ability to compete. So it is all the more important to invest in suitable programmes for prevention and control and to build on them.

The specialists for anti-bribery and anti-corruption (ABAC) from PwC’s international network support organisations in evaluating such risks, identifying potential and strengthening the management system when dealing with bribery or corruption.

We place an emphasis on our pragmatic approach that reconciles the increasingly complex risk landscape of national and international guidelines with the characteristics of your organisation – such as its size, industry and business partners. The experts at PwC are very familiar with all the provisions and expectations of the regulatory authorities.

German and cross-border investigations show time and again that companies and their managers are held liable for bribery and corruption. The authorities usually investigate not only the individuals but also the companies involved in the illegal behaviour.

No company is immune to corruption

With the globalisation of the economy, companies have to operate in an increasingly strict regulatory environment. In particular, the risks associated with bribery and corruption have become a major challenge and threat for organisations operating nationally and internationally. It’s not only listed companies that are affected, but also medium-sized companies, which, as a result of their flat hierarchies, business activities in high-risk countries or sales activities, can be susceptible to giving or receiving undue advantages.

The consequences of bribery and corruption are far-reaching:

  • Insecure business, regulatory and investment environment
  • Financial damage due to fines and penalties
  • Loss of trust, brand integrity and reputation across all stakeholders: from customers and employees, governments and investors, to creditors and business partners

The basics of anti-bribery and anti-corruption

Organisations are responsible for setting up measures and processes to ensure compliance with the rules, be it a matter of redesigning, implementing or adapting programmes, or integrated compliance management systems to combat bribery and corruption.

There are a wide variety of anti-corruption standards, such as IDW AsS 980, UK Bribery Act 2010, US Foreign Corrupt Practices Act (FCPA) and international standards on anti-bribery management systems (ISO 37001:2016). The requirements for a proper audit of compliance management systems according to those standards typically include seven basic elements: leadership and culture, objectives, risk assessment, programme and actions, organisation, training and communication, and monitoring and improvement.

The basics for combating bribery and corruption

Leadership and culture

The corporate culture forms the basis for compliance with ABAC regulations within a company. It is shaped by the attitude and behaviour of management. This “tone at the top” has a big impact on the willingness of employees to comply with the regulations.

You should ask yourself these questions:

  • What general principles of conduct are necessary and appropriate for achieving compliance with the existing regulations?
  • Are those principles of conduct exemplified by our management and does our management support compliant behaviour on the part of the employees?

Objectives

The objectives relating to combating bribery and corruption are based on the general corporate objectives and are linked to the assessment of risks. An implemented management system for combating bribery and corruption covers the relevant sub-areas and defined rules.

You should ask yourself these questions:

  • Do we derive our objectives and priorities for combating bribery and corruption from the results of a risk assessment?
  • Do we communicate the respective objectives to the relevant target groups?

Risk assessment

It is important to identify the risks that could lead to potential infringements, such as vulnerable business activities involving grants, donations and sponsorships. For example, when doing business with public officials in certain countries or regions, companies can use the Corruption Perception Index (CPI) to assess corruption in the public sector.

You should ask yourself these questions:

  • Are the general and business-specific risks known and do we check them systematically and regularly?
  • Have we entered into any significant contracts or joint venture arrangements with public entities or governments?
  • Do we use sales intermediaries, consultants or business partners to generate sales?
  • Have we checked the integrity of our business partners and intermediaries?

Programme and measures

Guidelines, operating procedures and other measures to prevent or sanction violations are implemented in order to limit the identified bribery and corruption risks.

You should ask yourself these questions:

  • Have we established specific policies and measures to ensure compliance?
  • What legal provisions are we subject to, for example in relation to corruption?
  • Do we have an anti-corruption policy?
  • Do we have processes in place to monitor business relationships with public companies or their representatives?
  • Are there processes and controls in place to ensure that all transactions and payments are properly documented and accounted for?

Organisation

The management defines the roles, responsibilities and structures and provides sufficient resources for anti-bribery and anti-corruption tasks.

You should ask yourself these questions:

  • Are the roles and responsibilities for compliance clearly defined? For example, have anti-corruption officers been appointed or has a compliance committee been set up?
  • Is the compliance organisation equipped with sufficient powers?
  • Who is the reporting submitted to and what is the number of employees and the annual budget in the assigned area?

Training and communication

The anti-bribery and anti-corruption programme – for example, in the form of a code of conduct or an anti-corruption policy – should be effectively communicated throughout the organisation. All employees must be aware of their responsibility.

You should ask yourself these questions:

  • How have we communicated the relevant regulations to the executives, line managers and employees?
  • How and at what intervals do we organise information events or training courses for executives/line managers, employees and sales people?
  • Have we also informed external suppliers and business partners about the regulations and required them to comply with those regulations?
  • Have we set up a whistleblower system that gives employees, business partners, customers and other stakeholders the opportunity to report infringements? Are employees familiar with that system and is it easily accessible to external third parties?

Monitoring and improvement

Businesses should continually monitor the appropriateness and effectiveness of anti-bribery and anti-corruption actions. Any weaknesses or infringements identified during the monitoring process should be reported to management and remedied.

You should ask yourself these questions:

  • Do we have an appropriate and functioning internal control system that also covers ABAC areas?
  • Are potential infringements investigated and mitigated?
  • What consequences and improvement actions have we derived from the results of the investigation?
  • Is the programme regularly reviewed and what are the background and results of that review?

What we offer

PwC has developed an integrated approach to help you protect your business from bribery and corruption. Our experts will support you in preparing for such challenges, reacting appropriately if the worst comes to the worst, and emerging stronger from possible incidents.

Prepare

Design and implementation of the compliance programme, risk assessment

Respond

Investigations into bribery or corruption, maturity assessment of the compliance programme

Emerge Stronger

Improve your compliance programme

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Our approach

How we support corporations, private equity firms and other institutional investors
With PwC, you have an experienced team of experts at your side who will support you with a holistic approach in the corporate and transaction environment.

Stakeholder-interviews

We prepare a self-assessment of the risks and conduct interviews with key management.

Objectives of the survey:

  • Understanding your business strategy, model and operations
  • Familiarisation with your risk and management systems

Review of documents

We request documents, data and other information and conduct integrity checks, transaction reviews and on-site visits on a global scale. The information we request may include:

  • Code of conduct
  • Organisational charts
  • Sponsorship and donation policy
  • Training concepts
  • Approval and release processes
  • Risk management and risk assessment guidelines
  • Internal audit reports
  • Whistleblower system
  • Contracts
  • Samples of compliance-sensitive accounts and transactions

Report and recommendations

Based on the interviews and documents, we create an overall assessment and derive measures that flow into a red flag report.

  • Summary and visualisation of the results
  • Development of a roadmap for the future based on recommended actions, priorities and values

Minimising risks in corporate transactions

Even the acquisition of companies can harbour major ABAC risks. If cases of fraud and corruption go undetected, there is a risk of high fines, legal consequences and loss of reputation. A due diligence check will reveal the extent to which the target company is acting in accordance with the law and which compliance measures must be implemented after closing.

Find out more

Companies that understand how to work against bribery and corruption and investigate responsibly avoid large fines and achieve more productive results both internally and with regulators.

Our services

Anti-Financial Crime Connected Digital Services Contract Management, Governance & Compliance Crisis Management Data Analytics Dispute Analysis and Litigation Support ESG Fraud Forensic Technology Solutions Global Intelligence Investigations

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Arndt Engelmann

Arndt Engelmann

Partner, Forensic Services, PwC Germany

Tel: +49 151 14806264

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