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With 2009 characterised as a year for excessive bank bonuses, questionable parliamentarian expense accounts and the exposure of an increased number of fraud and bribery cases, transparency and trust are two words which will no doubt resonate loud and clear in 2010. UK plc is in danger of reputational damage if time is not called on such behaviour going forward.

Hardly a day passed this year without yet another financial horror story hitting the headlines. No sooner had taxpayers bailed out the banks, bankers wanted their bonuses back. Month by month, politicians were unmasked as their claims for duck houses, moats and all manner of publicly offensive expenses were unearthed by the media.

“Whilst it makes for entertaining reading,” says John Burbidge-King, CEO of Interchange Solutions, “inevitably, as we have seen, the chickens come home to roost and individuals and businesses have ended up paying the price.

“One area that really does need critical attention in 2010 is how some British businesses conduct their affairs. With the economic climate continuing to have a serious impact on companies, there is enormous pressure to cut costs whilst securing new contracts. Many of those contracts will be abroad as opportunities diminish in the UK, especially in the public sector. All of this may be a recipe for businesses to cut corners and this is where bribery and corruption can rear its ugly head.”

The Bribery Bill, which is expected to become law early in 2010, will focus attention on business dealings and how companies conduct their affairs both at home and abroad. It will make it illegal to bribe a foreign official to obtain or retain business and will also make it an offence if businesses fail to prevent a bribe being paid by their employees or by other firms on their behalf.

The new corporate offence means that unlimited fines may be imposed on companies if found guilty. Furthermore, individuals who make illegal payments to secure business may face fines and imprisonment of up to ten years.

“Businesses involved in such criminal activity have always run the risk of stiff penalties, which can have a hugely negative financial impact and affect companies in many other ways,” says John Burbidge-King. “Just look at the recent case in Germany of MAN SE, one of the world’s largest truck manufacturers, recently fined €150.6 million for paying some €50m of bribes over the past 10 years. The fine was not the whole story. MAN also incurred legal and related expenses for over 70 lawyers; the CEO resigned along with other executives and senior management, not to mention ongoing individual prosecutions.

“Bribery has always been a criminal offence in the UK, but the Bribery Bill adds a dimension which companies need to rapidly take on board. Directors should be asking themselves now whether their anti bribery policies and processes would stand up to cross examination in the witness box. If not they may have no defence.

“By understanding that transparency and trust are hugely important in modern business – not just here in the UK but abroad as well – businesses can change this risk into real business value.

“By taking a more proactive approach, and reviewing and re-engineering their businesses, listed companies can reduce the likelihood of share price volatility, deliver business confidence in managing risk in new supply channels and markets, and reduce the possibility of disruption, unbudgeted resources and expenses, by mitigating any exposure to an allegation of corruption.”

Ends

Press information:

Glen Goldsmith
2thefore
Tel: 07812 766338
Email: glen@2thefore.biz


Editor notes

About Interchange Solutions – www.interchange-solutions.co.uk

Interchange Solutions helps organisations to underpin their reputation through the mitigation of bribery, corruption, fraud, cybercrime and related risk.

Interchange provides advice, training, due diligence and integrity audit of an organisation’s ability to mitigate corruption and related risk. The company submitted evidence to Parliament’s Joint Committee on the Draft Bribery Bill. Interchange is a member of the A|D|S, the trade association for aerospace, defence and security companies and the UK Defence Business Ethics Forum.

John Burbidge-King WB, MCMI is founder and CEO of Interchange Solutions.

A former officer in the Royal Marines, John has had senior roles in business from banking electronics, biometrics to security printing from Chile to China.

He has lived in the Far East, the Arabian Gulf and California; a member of the UK Fraud Advisory Panel, an Associate of the Institute of Risk Management, speaks Arabic and is a Court Assistant of the Worshipful Company of World Traders.

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