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16 June 2014

Compliance: Can We Prevent Corruption Within the Company?

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Continuing with the trend seen in the English-speaking world as well as some nearby countries, over the coming months we shall see how companies with headquarters in Spain will have to implement a violations prevention model within their organizations. This is a crucial step forward for a society intent on putting an end to the illegal behavior that we have lived over recent years, including graft, improper management, or fraud.

Just as implementing occupational risk prevention models or minding the social responsibility of companies has a direct and positive impact in the economic growth of organizations, so could the implementation of a violations model.

But in order for these models to really function, they must be implemented with the full and absolute commitment of the company, starting with its executives. A number of studies worldwide revealed in 2013 that 49% of the sales personnel believed that the anti-corruption policies of their companies were not relevant to their work. To make progress in this area is a complicated matter given the current climate of short-termism and demand for earnings at all costs.

Companies should take the opportunity afforded by the introduction of these programs or models to make their strategies regulatory compliant. They will need to verify that their employees have received training to understand and avoid graft and fraud, and that adequate checks are carried out to avoid these acts. These tasks, among others, shall be the responsibility of the regulatory compliance department.

This department, which will have to be coordinated with all the departments of the company, especially the legal affairs department, will be the charged with detecting legal or internal violations. It will inform the highest level of senior management of any non-compliance and be required to adopt the necessary measures to correct such situations as well as incorporate these new procedures or routines into the compliance program if required. In sum, it will amount to a continuous risk reduction policy.

And this, the risk reduction prism, will be the prism from which companies will have to look at compliance and, more specifically, the new forthcoming regulation. Being one step ahead with the implementation of adequate anti-corruption programs will not only prevent problems and unnecessary costs for companies. It might even turn into a competitive advantage, as the preoccupation for compliance is apparently not a short-lived trend but rather an increasingly important facet of worldwide regulation.

The entire company will be affected by this new regulation, starting with the highest executives. They will be the main responsible parties for their company’s awareness of the importance of these policies, for ensuring that the policies are not merely used as a smoke screen, and for disseminating the notion that beyond compliance to the law, what really counts is why it must be complied with and how the organization will be affected.

In sum, the opportunity must be seized to apply criteria of excellence and avoid a situation whereby our programs are merely questionnaires on what we do and don’t, but also serve to actually do things, thereby avoiding the trap of not complying where we seem to be saying that we do comply. If we do this, we will have turned compliance into a competitive advantage and not a high and cumbersome cost.

Eduardo Gómez García

Forensic Economist

More publications about Eduardo Gómez García

Auditing vs. Forensics: Eliminating Corruption in Organizations

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