21 March 2014 Insurance

Industry warned to mitigate bribery risks

The financial services industry in the UK must improve policies and procedures designed to prevent bribery, according to the British Standards Institution (BSI), commenting following the fine issued to broker Besso by the Financial Conduct Authority (FCA).

Besso was fined £315,000 by the FCA after it found the broker’s bribery risk procedures to be inadequate.

The BSI noted that this was the second such fine in the financial services industry in just three months. It said the financial services sector must take notice of this enforcement action from the FCA.

There is now a heightened imperative in the industry of the need to have clear policies and adequate procedures in place to prevent bribery, help ensure that workers are not being bribed and prohibit bribery with all the people you are doing business with, the BSI said.

“Recent trends have shown that corporate governance will be high on the agenda in 2014 and as part of this it is imperative that top management support and communicate the importance of anti-bribery policy throughout the organization,” said Suzanne Fribbins, Risk Management Specialists, BSI.

“Incidents of bribery and corruption have the power to undermine organizations at their very core. Sadly, the actions of individuals across all professional levels of a business can severely weaken the reputation of a company and expose it to regulatory risk. Robust businesses must defend themselves against these challenges by preventing incidents of white collar crime and adopting frameworks to assist with this, such as BS 10500. Businesses that fail to mitigate their exposure to these risks are threatening their integrity, their reputations and ultimately their bottom line.

“The UK is ranked 14th out of 177 countries in an index of perceived levels of public sector corruption in around the world so there still remains some work to do. Businesses across the spectrum, from FTSE 100 firms to SMEs, need to have an Anti-bribery Management System in place. Put simply, it’s a series of policies, procedures and controls that a company must put into effect to mitigate the risk of bribery and ensure its compliance with the law.  It ensures that you have a system in place, such that if there is a failure and bribery does take place either against or on behalf of the company then the system will ensure the company acts to investigate and deal with that bribery and puts in place preventative measures to make sure it doesn’t happen again.”

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