Survey Looks at U.S. Companies' 2013 FCPA Compliance PlansCatherine Dunn Corporate Counsel
2012-12-20 16:53:30.0
Is your company planning to make compliance program changes in light of new antibribery guidance from the Department of Justice and the Securities and Exchange Commission? If so, it won’t be alone, according to a recent poll conducted by Deloitte.
The survey results [PDF] come from more than 1,200 professionals in audit, compliance, legal, accounting, and finance functions who tuned into a recent Deloitte webcast about the U.S. Foreign Corrupt Practices Act guidance released last month. The consultancy shared the tallies exclusively with CorpCounsel.com.
What did we find out? Nearly a third of respondents—31.6 percent—said they do expect to revise their company’s anticorruption program based on the new guidance. Meanwhile, 20.7 percent said they were not planning any revisions, while 47.7 percent answered: “Don’t know/NA.”
Many survey respondents—about 44 percent—said they already had an effective anticorruption program in place.
But 23 percent said they had a compliance program that needs improvement; 13.4 percent said they didn’t have any such compliance program (at least, not that they were aware of); and 19.5 percent of the respondents said either they didn’t know if they had one, or the question wasn’t applicable to them.
That last set of figures is cause for concern, according to Bill Pollard, a partner in Deloitte’s financial advisory services practice. Many companies “continue to struggle with what the risks are in their international operations,” Pollard says, “and so, until they can understand what the risks are, there’s no way for them to evaluate whether or not they have an effective program in place.”
Pollard has a few suggestions to help companies get a handle on their compliance programs in 2013.
One of the keys to an effective risk assessment is to involve in-country employees or to seek outside assistance from local experts. “To truly be effective, you have to understand what the risks are in the local geographies,” Pollard says. “The risks in Russia are in many ways going to look different from the risks in China or the risks in Latin America.”
Pollard also recommends that companies focus resources on the highest areas of risk. In the context of anticorruption, that means identifying areas that are susceptible to government interaction—such as licensing and permitting, customs brokerage, sales, and supply channels. “You can concentrate your limited resources on the highest points of potential risk,” he says.
Survey respondents revealed the compliance areas where they expect to make the most significant changes in the light of the new guidance, with due diligence ranking high. The results were as follows:
- Due diligence and monitoring of third parties: 25.8 percent
- Training and continuing advice: 17.8 percent
- Travel, gifts, and entertainment practices: 11 percent
- M&A/joint venture due diligence: 5.2 percent
- Won’t be making any changes: 8.2 percent
- Don’t know/NA: 31.9 percent
Those results are a mixed bag in Pollard’s eyes. He says it’s a “positive sign” that a quarter of respondents are paying attention to due diligence and monitoring of third parties. But given DOJ and SEC’s enforcement records in the M&A/joint venture sphere, Pollard was surprised by the low tally in that category. “It’s an area that the government is going to be highly focused on,” he says, adding: “If you look throughout the new guidance, there are multiple places where they talk about hypotheticals, as well as lay out expectations for what companies need to be doing in that space—both on a pro-active pre-close basis, as well as post-acquisition integration.”
The vast majority of poll respondents said they fully expect to see more crackdowns on FCPA compliance: Now that the updated guidance has been published, 70.7 percent said they anticipate greater FCPA enforcement from U.S. regulators.
See also: "DOJ and SEC's New FCPA Guidance Provides a Desktop Compliance Reference for Companies," CorpCounsel, November 2012.
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