Executive Briefings

Half of Multinationals Don't Screen for Third-Party Corruption, Survey Says

Procurement professionals need to protect their businesses from the growing legal risk of third party corruption. They need to deliver "high levels of professional skill, knowledge and integrity," said David Noble, group CEO of CIPS.

Half of Multinationals Don't Screen for Third-Party Corruption, Survey Says

His comment follows revelations that half of multinational businesses surveyed carried out basic corruption checks on third parties.

New legislation continues to make companies increasingly liable for third parties' acts of corruption or bribery. This puts added pressure on businesses to conduct the right due diligence on their partners.

Low levels of due diligence in large businesses are “disappointing, but maybe not that surprising,” said Noble. “A licensing approach to procurement and supply will begin to ensure the right structures are in place to enable this to happen, with the attendant law of consequence that the licence will be lost if malpractice is discovered.”

The survey of 604 chief compliance officers and heads of legal, conducted on behalf of law firm Hogan Lovells, found half of respondents (53 percent) said they conducted desktop due diligence on third parties.

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His comment follows revelations that half of multinational businesses surveyed carried out basic corruption checks on third parties.

New legislation continues to make companies increasingly liable for third parties' acts of corruption or bribery. This puts added pressure on businesses to conduct the right due diligence on their partners.

Low levels of due diligence in large businesses are “disappointing, but maybe not that surprising,” said Noble. “A licensing approach to procurement and supply will begin to ensure the right structures are in place to enable this to happen, with the attendant law of consequence that the licence will be lost if malpractice is discovered.”

The survey of 604 chief compliance officers and heads of legal, conducted on behalf of law firm Hogan Lovells, found half of respondents (53 percent) said they conducted desktop due diligence on third parties.

Read Full Article

Half of Multinationals Don't Screen for Third-Party Corruption, Survey Says