Reducing Bribery and Corruption Risks | Compliance Guide | Skillcast

Every year, trillions of dollars are lost through bribery and corruption. The highest bribery risk firms face comes from third parties. So, how can you spot it?

Key takeaways

• Third-party relationships are the highest risk area. Most bribery exposure arises from third parties, such as intermediaries, agents, and suppliers. Firms must prioritise strong due diligence, ongoing monitoring, and risk controls tailored to these high-risk relationships.

• Six red flags should inform your risk strategy.Common indicators of potential bribery include suspicious payment structures, excessive hospitality, vague contracts, undisclosed conflicts of interest, pressure for rapid decisions, and opaque third-party arrangements. Spotting these early helps firms prevent misconduct before it escalates.

• Culture, controls and accountability work together.Effective anti-bribery programmes combine clear policies, whistleblowing channels, regular training, and leadership commitment. Embedding risk assessment, activity monitoring, and senior oversight ensures both preventative and reactive measures are in place.

Bribery and corruption can devastate organisations, undermining their reputation, financial stability, and workplace culture. In the UK, laws such as the Bribery Act 2010 make organisations legally accountable for preventing these unethical practices.

Understanding bribery and corruption

Bribery involves offering, giving, receiving, or soliciting something of value to influence an outcome. Corruption refers to dishonest or fraudulent conduct by those in power, often for personal gain. Examples include:

• Bribes: Gifts, hospitality, or payments to secure a business deal.
• Kickbacks: Payment for favourable treatment or access.
• Nepotism: Hiring or promoting based on personal connections rather than merit.

The Bribery Act 2010 outlines four main offences:

1. Bribing another person
2. Being bribed
3. Bribery of foreign officials
4. Failure of a commercial organisation to prevent bribery

Businesses must take reasonable steps to prevent these activities or face significant penalties

What are the six red flags of bribery and corruption?

Identifying potential risks is the first step in prevention. Common red flags include:

1. Unusual payment structures: Large or irregular payments, particularly to offshore accounts.
2. Excessive hospitality or gifts: Lavish or disproportionate gestures designed to influence decisions.
3. Opaque contracts: Vague agreements lacking clarity on terms or deliverables.
4. Conflict of interest: Undisclosed personal relationships influencing business dealings.
5. Pressure for quick decisions: Push to bypass due diligence for immediate approvals.
6. Third-party involvement: Use of intermediaries to obscure unethical transactions.

How can you reduce bribery and corruption risks?

1. Develop robust policies and procedures

Clear anti-bribery and corruption policies set the tone for ethical behaviour. Include guidelines on:

• Acceptable gifts and hospitality
• Reporting suspicious activity
• Zero tolerance for unethical practices

Ensure employees are aware of these policies through regular training and visible communication. Developing robust policies and procedures helps to establish clear guidelines, promote ethical decision-making, and ensure accountability.

Well-defined policies set expectations, while enforcement mechanisms deter misconduct and protect organisational integrity.

2. Conduct risk assessments

Identify and evaluate areas most vulnerable to bribery and corruption, such as:

• High-risk regions or industries
• Transactions involving intermediaries
• Large-scale procurement processes

Regular assessments can reveal vulnerabilities, assess potential threats and guide mitigation strategies. Proactively addressing risks strengthens compliance efforts and safeguards companies.

3. Implement due diligence measures

Thoroughly vet third parties, including suppliers, contractors, and agents. Review their:

• Ownership structure
• Financial records
• Past compliance history

4. Foster a speak-up culture

Encourage employees to report unethical practices by:

• Providing anonymous reporting channels
• Protecting whistleblowers from retaliation
• Actively responding to reports

Transparency and accountability build trust and deter unethical behaviour. A strong speak-up culture empowers employees and encourages open communication and prompt action on reports to enhance transparency, accountability, and ethical business practices.

5. Monitor and audit activities

Regular audits can identify irregularities or weaknesses in internal controls. Focus on areas such as:

• Financial transactions
• Contract approvals
• Employee expense claims

6. Ensure leadership commitment

Management must lead by example, promoting ethical practices and prioritising compliance. Regularly communicating the importance of anti-corruption efforts reinforces organisational values.

Ensuring leadership commitment helps to set a strong ethical tone from the top, demonstrating accountability, and fostering a culture of integrity. When leaders actively support anti-corruption initiatives, employees are more likely to follow ethical standards.

What are the legal and reputational consequences of bribery?

Failure to address bribery and corruption can result in:

• Legal penalties: Fines, sanctions, or imprisonment under the Bribery Act 2010.
• Reputational damage: Loss of stakeholder trust and public credibility.
• Operational disruptions: Internal investigations divert resources and affect productivity.

Employees, leadership, and third parties must work collaboratively to uphold integrity and transparency in every aspect of the business.

How training and awareness programmes can help

Employee education is critical in reducing bribery risks. Effective training should include:

• Case studies of real-life corruption scenarios
• Role-playing exercises to practice ethical decision-making
• Guidelines for recognising and reporting unethical behaviour

Want to learn more about anti-bribery compliance?

We offer a range of e-learning courses which focus on anti-bribery and corruption, which can be found in our Essentials Library. These courses are designed to help your organisation meet fundamental compliance requirements.

If you are looking for focused training, our Bribery Prevention Training Package offers a complete solution for your compliance programme. Anti-bribery and corruption courses include:

• Anti-bribery Training Course
• Bribery Prevention Training Course
• Gifts and Hospitality Training Course
• Business Ethics and Integrity Training Course

We have also created a comprehensive bribery and corruption roadmap to help you navigate the compliance landscape.

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