Anti-corruption compliance programmes have never been more important

Written by Penny Milner-Smyth on Monday April 15, 2019

Danger in distraction:

Anti-corruption compliance programmes have never been more important


Take a moment to look beyond the turbulence of current affairs and traverse the terrain of a global anti-corruption trends monitor. What you will see, from a vantage point set back from the day’s headlines, may surprise you. Despite daily disappointments and significant setbacks in a seeming sea of chaos, the tide continues to turn against corruption.


Let’s look back over the past 12 months.


On the streets and in the ballot boxes, anti-government protest against political corruption had profound consequences. History has taught us to be sceptical of the motives and likely delivery on anti-corruption promises by politicians on the campaign trail, but the power of public opinion is being noted by ruling parties around the world.


In less than a year, we’ve seen citizens taking to the streets to protest corruption in Dominican Republic, Mongolia, Montenegro, Peru, Romania, Russia, Tahiti and Ukraine. In the first three months of 2019 we’ve seen the presidential inauguration of Jair Balsonaro in Brazil, the election of Nayib Bukele in El Salvador (‘There’s enough money when no-one steals’) and of Zuzana Caputova in Slovakia (‘Let’s fight evil together’). Despite diverse political persuasions, these are leaders with one thing in common: a strong anti-corruption stance. 


And what of those former statesmen and women replaced by a new wave of leaders? Many are already serving as cautionary tales - if not time in jail. If we included ministers and senior government officials on our list, we’d have a veritable alphabet of countries whose recently replaced political figures are the subject of current judicial scrutiny. Restricting the list to former heads of state in trouble, this past year takes us on a tour of Argentina, Bangladesh, Brazil, Croatia, Colombia, El Salvador, Egypt, France, Guatemala, Kyrgyzstan, Malaysia, Maldives, Mongolia, Pakistan, Peru, Romania, South Korea and South Africa.


Lessons are being learned. Columbia, Greece, Italy, Myanmar, Rwanda, Sri Lanka, Solomon Island and Tunisia are just a few countries where more stringent laws and new programmes have been drafted and devised to net corrupt officials.


You may not agree with all his methods, but you should credit Chairman Xi with his unrelenting commitment to rooting out government corruption in China.  Beijing’s Qincheng maximum security is overcrowded with disgraced Communist Party officials who have been convicted of bribery and dereliction of duty. His stated determination? To avoid the fate of ruling parties elsewhere, whose seemingly unassailable majorities collapsed due to a catastrophic loss of public support arising from government corruption.


Russia may be perceived to be among the world’s most corrupt countries, but 1 303 state officials were fired for suspected violation of corruption rules and loss of trust in 2018.


The kids may not be alright. The offspring of former presidents currently also serving as cautionary tales include sons (Angola, Argentina, Egypt, Equatorial Guinea, Liberia, Mozambique, South Africa, Thailand) and daughters (Angola, Peru, Uzbekistan). In different ways each are finding the spoils of their inherited influence less enjoyable with their privileged protection removed. Spouses and siblings? They would require their own list altogether.


Climate change, at global and organisational levels, took centre stage. Yes, some governments dialled back on sustainability and human rights issues, easing regulatory compliance pressure on corporations. But the governance mantles they shed are being taken up by other influential players.


Second and third tiers of government used their mandates to impose compensatory regulations within their jurisdictions. Corporations themselves came out as active proponents of principles and practices we previously assumed they were complying with but not committed to.  


Powerful sovereign wealth and large pension funds continued to shift large sums towards investments in ethically-run corporations and sectors less associated with social and environmental harm.


As ‘us and them’ polarisation seemed to reach a peak, high-profile sexual harassment claims raised awareness of gender-based abuse of power and discrimination. This prompted a focus on creating ‘speak up’ cultures in the workplace – encouraging those who would otherwise remain silent to report all forms of unethical conduct.


Hollow victories were exposed. The glare of the anti-corruption spotlight on mega sporting events persists post-Rio. Our attention has been drawn to irregular bidding affecting the choices of host city, if not also stadium construction, from Japan to Qatar.


More heroes became zeroes. Adding to the fury of sports fans, who may have resigned themselves to corruption in athletics, cycling, cricket and soccer, were revelations suggesting that victories we shared with top sporting achievers in codes like tennis and badminton were similarly tainted.


We’ve finally been able to put a face to the name ‘failed state’. Venezuela. While some may use this national tragedy to argue for or against a particular economic system, we must not forget the role played by high-level corruption that was essentially unmasked by the sharp drop in the oil price in 2014.


There’s no taking the foot off the corporate anti-corruption compliance pedal. The past year has seen significant reputation damage and stinging regulatory enforcement actions against corporations who call Australia, Canada, Denmark, France, Germany, Sweden, Switzerland and the United States home - all countries that fare well on the Corruption Perceptions Index.


Despite early anticipation that the current administration would ease its foreign bribery enforcement actions, the US Foreign Corrupt Practices Act (FCPA) continued to exert a profound influence on corporate compliance practices around the globe. Consider just two facts:

  • Nine of the current top ten FCPA enforcement actions of all time now feature foreign corporations, with settlements costing them between $412 million and $1.78 billion. These penalties include ill-gained profit ‘disgorgement’ that can accompany a highly-prized ‘declination’ to prosecute.


  • A record $2.89 billion was paid in FCPA-related Department of Justice (DOJ) and Securities Exchange Commission (SEC) enforcement actions by 16 companies in 2018. Most of these were not US corporations. The enforcement of its anti-foreign bribery legislation does not need to be inconsistent with an ‘America First’ philosophy when the penalties are being paid by corporations in France, Japan, Canada, Israel, Brazil and Switzerland.


In the UK, 2018 saw the first successful prosecution of a company for failing to prevent bribery in terms of The Bribery Act, highlighting the importance of having meaningful and onerous ‘adequate procedures’ in place to prevent bribery. 


Whistleblowing legislation proliferated and an ever-increasing number of insiders from companies in foreign lands reported unethical conduct by their employers to the US SEC whistleblowing programme. Namibia, Rwanda, Kosovo and Australia are just four countries that enhanced whistleblower rights, which will also be the subject of EU-wide protection in the near future.


The big print? Anti-corruption enforcement agencies sent a clear message to the corporate world that there is no resolution without remediation. Moreover, the harshness or leniency of the penalties will vary proportionately to the measures taken to co-operate and comply. That is, fully co-operating with investigations, starting with voluntary disclosure of course, and putting in place comprehensive ethics and compliance programmes to deter the likelihood of repeat offence.


If you doubt the impact of anti-corruption enforcement, give a thought to some of the sectors feeling the pinch as conspicuous consumption becomes a synonym for unexplainable wealth: estate agents who made a living selling now-devaluing prime property in London and New York to anonymous shell companies, private jet suppliers to Saudi Arabia and luxury watch manufacturers in Europe, to name a few.


There’s no hiding behind the corporate veil. CEOs and company presidents who have already vacated their offices this year due to governance failings include Nissan’s Carlos Ghosn, Swedbank’s Birgitte Bonneson and Wells Fargo’s Tim Sloan.


Luckier are those in one of the world’s fastest growing professions – compliance. Reports out of Copenhagen are that Danske Bank alone is increasing its number of compliance and anti money laundering officers by 600. Packages being offered to compliance specialists are rising steadily there and elsewhere.


The anti-corruption field is notable for the high esteem in which its civil society organisations are held. In 2018, as Transparency International turned 25 it further strengthened its influential position. This included being a go-to for corporate compliance experts seeking guidance on corruption risk assessment from its outstanding research reports and guidelines.


What is without doubt is that an effective ethics and compliance programme is being entrenched as the best line of defence against the unwelcome attention of enforcement agencies and loss of business reputation. And so it is that we see the turn of the tide; that point when organisations decide to embed pre-emptive anti-corruption practices that will in turn have a positive impact on every level of society.


Learn more about the Specialist Certificate in Anti-Corruption

Penny Milner-Smyth is the principal author of the ICA Specialist Certificate in Anti-Corruption



You may also like:


This article forms part of the #BigCompConvo - Join us as we explore and debate the latest challenges and issues facing you and regulatory and financial crime compliance professionals all over the world. If you’d like to contribute an article as part of the Big Compliance Conversation get in touch with us at

Big Compliance Conversation


Please leave a comment

You can leave the name empty should you wish to remain Anonymous.

You are replying to post:



Email *

Comment *

Search posts

View posts by Author