marim fraud & corruption risk management: innovate within...
TRANSCRIPT
MARIMFraud & Corruption Risk
Management: Innovate Within Boundaries
Dr Mark LovattCEO, Trident Integrity Solutions Sdn Bhd
www.trident-integrity.com
Since 2011 we have worked with….
Visit our website for more information
Question:
how does the task of
'creating value'
for an organisation work?
How is value CREATED?
The old way of thinking
How is value built today?
How is value built today?
80% of these company's value is non-tangible
• Brand / good will
• Intellectual property
• Human capital
• Culture
As risk managers, how do you deal with that?
What happens when things go wrong for a non-tangible-asset-based company?
Facebook in trouble for data breach
How is non-tangible value destroyed?
We're talking about:
• Brand / good will
• Intellectual property
• Human capital
• Culture
By damage to
REPUTATION
What factor is a
primary risk
to reputation?
Top 10 US FCPA prosecutions of companies for bribery
Odebrecht/Braskem (Brazil, 2017): $2.6 bn (total)
Siemens (Germany, 2008): $1.6 bn (total)
Telia Company AB (Sweden, 2017): $965 million
Société Générale (France, 2018) $860 millions
VimpelCom (Holland, 2016): $795 million (total)
Alstom (France, 2014): $772 million
KBR/Halliburton (USA, 2009): $579 million
Teva Pharma (Israel, 2016): $519 million
Keppel Offshore (Singapore, 2017): $422 million
Och-Ziff (USA, 2016): $412 million
The UK Bribery Act: prosecutions underway
MACC Amendment: Corporate Liability
France also recently strengthened its laws
• Sapin II came into effect 1 June 2017
Australia is next…
Your reputation is essential for your business
2015 Dow Jones Anti-corruption Survey*
• Survey conducted among more than 250 compliance
professionals and companies worldwide
• 76% said that reputational issues would cause a
review of their business partners
• 68% said that they delayed / stopped working with a
business partner because of concerns about
violations of anti-corruption regulations
*2015 Anti-Corruption Survey Results, Risk & Compliance, Dow Jones
Harapan are already hard at work on this
In today’s world, the Internet knows everything. And it never forgets.
Is value creation enough?
Value created but not protected is like a leaking bucket
How is a sustainable business created?
Value Creation
Value Protection
How is value PROTECTED?
Value is protected by GOVERNANCE
• Risk assessment
• Policies, procedures and guidelines
• Internal monitoring and enforcement (IA, Investigations, DIs etc.)
• Committees / Board of Directors
• Statutory Bodies & Regulators
• Enforcement bodies
Question:
How many of you currently have
Bribery & Corruption risk
on your risk register?
Bribery risk assessment
• The assessment needs to cover the main bribery risk areas:
– Procurement, Finance, Legal,
– Agents / business associates
– Specific projects & large transactions
– Company strategy
– High-risk positions (procurement, sales)
– HR procedures: appointment, incentives/bonus schemes and promotion
If Bribery & Corruption risk is recorded, what can you do to
protect the value of your company?
"Innovation within Boundaries"
The new international standard: ISO 37001
• To provide assurance for companies that their anti-bribery system comprises ‘adequate procedures’ regarding bribery & corruption
• To provide an international certification for anticorruption systems
• Published 15 Oct 2016
ISO 37001:2016 structure
ISO 37001 Project Plan
ISO 37001:2016 ABMS
Measures and controls to help prevent, detect and respond to bribery, among them:
• Anti-bribery policies and procedures, including:
• Gifts and hospitality,
• Charitable donations & sponsorships
• Facilitation payments
• Top management leadership, commitment and responsibilities
• Whistleblowing: policy & process design
• Conflict of interest management procedures
• Due diligence for risk areas (staff & companies)
• Communication and training
• Monitoring, reporting & investigation
Overall, what will the ABMS deliver?
TRAINING, AWARENESS & COMMUNICATION
General staff trainingHot job staff training
Onboarding Internal communicationSupplier communication
Refresher trainingOngoing communication
ENFORCEMENT, MONITORING & IMPROVEMENT
AuditingInvestigations
Management reviewNon-conformity & corrective action
System performanceOngoing risk assessmentContinual improvement
TRUST
COSTS REDUCED
RISK REDUCED
STAFF CONFIDENCEINVESTOR CONFIDENCE
PARTNER APPROVAL
REPUTATION PROTECTED
POSITIVE MEDIA
SHAREHOLDER ASSURANCE
INTEGRITY CULTURE
CORPORATE VALUE: INTEGRITY
POLICIES & PROCEDURES
Gifts & HospitalityWhistleblowing
Conflict of interestDue diligence
Staff screeningProcurement Process
Financial Process Investigation process
Looking further ahead
Where can innovation be applied?
• Smart phone apps
– Gamification
– Information access
– Reporting
• Online tools / service providers
– Due diligence, HR services
On its way…
