So, finally, the Guidance under the Bribery Act is with us and the requirement for businesses to have adequate anti bribery procedures in place comes into force from 1st July 2011.
But what does it mean for the typical small or medium sized business?
For the last 12 months or so, more and more has been written about the Act by journalists, lawyers, accountants and other professionals. All have stressed the need for businesses to have adequate anti bribery procedures in place because without ‘adequate procedures’ an upstanding Company Director might just find himself in the dock alongside his errant sales representative who for the last 18 months has been giving backhanders to the buyer employed by their biggest customer.
Surely it can’t be that bad? How on earth can an owner or Director of a business be penalised for something he or she knew nothing about?
Well, to some extent, it is that bad. If an act of bribery is committed on behalf of an organisation then the Directors of that Company are liable to prosecution, unless they can show that they had in place adequate anti-bribery procedures. If such procedures are in place then there is nothing to worry about.
Adequate Procedures
If this means your business has to introduce changes, what are ‘adequate procedures’ anyway? How much time/money will you have to spend on compliance? And what constitutes bribery in the first place?
Dealing with the last point, Bribery involves giving someone ‘a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so.’
Fortunately, hospitality is not covered by the Act, so you don’t have to worry about your sales team continuing to wine and dine clients.
The term ‘adequate procedures’ is not easy to define. What’s more it will vary from organisation to organisation.
The good news is that many organisations will face little or no risk of bribery, especially if business is undertaken primarily in the UK. Assessing the risk of bribery is the starting point in the implementation of ‘adequate procedures’.
Risk Assessment
A Risk Assessment is relatively simple to undertake. If the risks of bribery are low then very little might need to be done in terms of an anti bribery strategy. The greater the risk, then the more onerous the strategy.
For most small/medium sized businesses, the risks aren’t enormous and a straightforward set of anti-bribery procedures can be introduced following a simple assessment. Whilst the strategy will have to remain under review for the future, the organisation will have peace of mind going forwards – something that may or may not be said of the competition.
Matthew Claughton is the Managing Partner of Olliers Solicitors, winner of the Manchester Crime Awards, Crime/Regulatory Team of the Year 2011.
Olliers undertake Risk Assessments and advise on adequate procedures under the Bribery Act.
