A Climate Change in Business Ethics - Keeping Your Business Legal

Everyone is familiar with the notion of climate change but it’s not just the weather; it might be attitudes to diesel emissions, disruptive businesses such Uber and Amazon or the rapidly changing global attitudes to business ethics.

There have not been many prosecutions under the UK Bribery Act 2010; they take time, but many are in the pipeline. Corporate cases prosecuted under the US Foreign and Corrupt Practices Act 1977 only ramped up in recent years and where there were convictions it was costly for the companies and individuals caught in the cross hairs of the law.

The USA and UK are not alone in introducing/updating their anti-bribery laws – so have Italy, France, South Korea and many other countries. Many cases are investigated across national jurisdictions such as Rolls-Royce. However, bribery and corruption are only one dimension of an increasing global legislative and joined up enforcement focus on business malpractices, which includes modern slavery.

So, you might ask, what’s the problem with bribery as long as it’s done by an agent/intermediary – “surely that’s the way of doing business in many foreign countries” and/or “I get my components much cheaper from some overseas countries” turning a blind eye to enforced or child labour in your supply chain? Do you really fancy doing 10 years in a foreign prison? And how might the exposure of your company using child labour in its supply chain play out in the media?

Since smartphones became available in 2006 (now used by millions worldwide) communicating unethical behaviour through social media is easy. Just look how quickly social media brought down Cambridge Analytica and overnight severely damaged Facebook’s reputation and share price. “They are only after the big fish” you might say. That’s out of date! Small companies have been convicted for bribery too such as Skansen Interiors, earlier this year

A wide range of practices, from bribing in order to secure business to the use of enforced labour in the supply chain, car washes, hotel cleaners and in nail bars, are unacceptable and  potentially a criminal offence, at home and abroad. Unethical behaviour damages corporate reputation and customer trust. It adversely affects directors, employees and the long-term sustainability of the company, including access to finance.

Post Brexit, of necessity, many exporters will move into markets with a higher potential risk of corruption be it for sales or supply. Embedding a robust approach to business ethics as a part of and not apart from the business strategy creates advantages; a better understanding of markets and potential partners; the ability to navigate the corruption traps and get ahead of competitors. Increasingly, companies and customers will demand evidence of high ethical standards as the cost of wrongdoing damages all parties, notwithstanding civil society, your employees and their families. A new international standard ISO37001:2016 anti-bribery management system is gaining ground worldwide as it sets a recognised benchmark by which organisations can be assessed on their anti-bribery measures. This also feeds into their overall business ethics and compliance approach.

And….don’t forget the power of the smartphone! 

Article written by John Burbidge-King - Interchange Solutions Limited 

Website:- http://interchange-solutions.co.uk/

Strong & Herd will shortly be introducing a brand new course covering procedures on anti-bribery and modern slavery.  Full details to be issued soon.

 

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