17 September 2009
FTSE-listed companies are failing to mitigate the risk of overseas corruption, according to a study by KPMG.
Of 109 firms surveyed, 43 per cent did not have systems and controls to stop staff using bribes to win contracts abroad.
More than half the companies with no policy said they did not need one or it was not relevant to their industry.
This was despite recent high-profile cases of fraud abroad, as well as plans to increase legislation under the UK's Bribery Bill.
In addition, anti-fraud experts told SM this summer they expect a substantial rise in prosecutions of UK firms involved in corruption abroad. It followed the prosecution of engineering firm Mabey & Johnson, the first UK company to be taken to court for corruption in respect to overseas contracts (News, 23 July 2009).
Of the companies with anti-bribery measures in place, only 37 per cent had specific rules on corruption, while most incorporate it into their wider corporate ethics.
This was despite two-thirds of the respondents admitting there are places in the world where it is not possible to win deals without using bribery. Just 35 per cent of the respondents said they chose not to do business in a country where corruption is a known problem.
The study also found there had been a 44 per cent rise in companies carrying out internal bribery probes compared with 2007. Fewer than five per cent said they would immediately alert an external regulator to a corruption issue.