MITIGATING THE RISK OF CORPORATE FRAUD AND CORRUPTION
RC: Would you agree that the need for multinational corporations to monitor, prevent and detect suspicious activities within their organisation is perhaps greater now than ever before? Is this especially true for those whose operations extend beyond national borders?
Scott-Mackenzie: The increasing complexity of businesses provides greater scope than ever for white-collar crime. Companies expanding overseas can have difficulty in maintaining a rigorous control environment in foreign locations and can struggle to create an environment conducive to early detection. The growing use of technology, such as electronic banking, and increased susceptibility to cyber crime means that even domestic companies are now no longer immune to the effect of international fraud.
Dean: There is no question that the combination of increased foreign investment in emerging markets – perceived as the only markets enjoying significant growth – and the increased law enforcement focus on bribery and corruption have made anti-corruption compliance a dominant concern for global companies. Having in place an effective compliance program to deter, detect and remedy bribery, including instituting and monitoring proper internal controls, is the current preoccupation of leading global companies. Building cultures of compliance amid great economic pressures is a key challenge. This requires leadership and follow-through.
Carr: The need for all organisations to monitor, prevent and detect suspicious activities within their organisation is greater than ever before: most fraud comes from within the organisation. This is especially true for multinational corporations whose operations extend beyond national borders because of their inevitably more decentralised structure. Moreover, the DOJ and the SEC have ramped up their enforcement, especially of the FCPA, in the last several years. Other countries are also passing their own versions of the FCPA.
Jan-Mar 2013 Issue
Baker & McKenzie LLP
Berkeley Research Group