Kroll, the world’s premier provider of services and digital products related to valuation, governance, risk and transparency, today revealed that companies in the UK are some of the most confident when it comes to their bribery and corruption risk strategies, yet illicit activity persists.
Kroll’s Global Fraud and Risk Report shows that the majority (84%) of UK respondents agreed that bribery and corruption risk was given sufficient board-level attention in their organisation and that they were more confident in their internal record-keeping (only 24% ranked it as their top internal threat compared to 31% globally). Additionally, firms in the UK were more likely to be using data analytics to proactively detect bribery and corruption risk (92% vs. 86% globally).
Despite this confident outlook, companies in the UK are by no means watertight. According to Kroll’s research, they are less likely to have conducted an enterprise-wide bribery and corruption risk assessment in the last five years (77% vs. 82% globally), highlighting that almost a quarter (23%) are not capturing the full picture of risks facing their business at any one time.
Half (49%) of UK respondents rank lack of visibility over third parties as their biggest bribery and corruption threat, above the global average (46%) and higher than their European counterparts in France, Germany and Italy (44%, 35% and 47% respectively). This news comes as developed economies like the UK are increasingly dependent on complex international supply chains, despite consistently showing concerns over third-party risk exposure.
The report shows that globally, 57% of respondents at companies with a turnover of more than $15 billion (bn) reported a very significant impact of illicit activity, such as fraud, corruption and money laundering on their organisation, with a further quarter (25%) describing the impact as somewhat significant. This trend continued for firms with an annual revenue of between $10 bn–$15 bn, with 48% of respondents saying their organisation had been very significantly impacted and 44% reporting the impact was somewhat significant.
Zoe Newman, Managing Director, Forensic Investigations and Intelligence, Kroll said, “It has been an unprecedented year for corporate risk, with firms simultaneously facing threats from all angles, including increasingly complex supply chains and the impact of COVID-19 measures. While it is good news that so many organisations are bolstering defences with proactive measures such as data analytics and that bribery and corruption risk is on the boardroom agenda, the findings from this year’s report leave us with an important question: Why are bribery and corruption threats persisting and still having such a big impact? Poor record-keeping or the inability to adequately monitor frontline teams and regional offices are typical vulnerabilities that are often overlooked.
“Then there’s the human factor: An organisation can have the best possible compliance program in place on paper, but if the human elements of the chain aren’t well managed, educated or equipped to act, non-compliance or illicit behaviour will continue to prevail and go undetected.”
This year’s findings showed that global organisations were feeling vulnerable to both internal and external threats, with nearly half (46%) of all respondents citing lack of visibility over third parties as the number one threat relating to bribery and corruption risk. Weaknesses in internal record-keeping was second on the list of top concerns (31%) followed by employees’ actions at 23%.