Sweett Group plc recently became the first UK-listed company to be convicted and sentenced for the corporate offence of failing to prevent bribery under the Bribery Act 2010. The company’s punishment has proved substantial: widespread adverse publicity and a financial penalty of £2.25 million, including a costs award to the Serious Fraud Office.
It seems inevitable that more prosecutions under the Act will follow. Many employers may have been feeling unconcerned so many years after the legislation’s introduction, confident in the knowledge that they had shown the foresight to update their policies regarding bribery when it came into force. But as the Sweett case highlights, effective compliance is only as strong as an organisation’s weakest link.
So, what went wrong in this case? Section 7 of the Act provides that an organisation will be guilty of an offence if an ‘associated person’ (this could be an employee, an agent or even a subsidiary company) bribes another person either with the intention of obtaining or retaining business, or in order to gain a business advantage. Organisations only have one potential defence to a prosecution: they have to prove they had ‘adequate procedures’ in place to prevent this kind of unlawful conduct.
The Sweett Group failed to ensure messages concerning the kind of conduct it required from anyone working for the business were communicated to, or acted on, by all parts of the organisation. As a result, when a Middle East subsidiary was found to have offered bribes to secure a contract, the company was unable to defend an allegation that it had failed to prevent bribery.
The case illustrates the far-reaching effect of the Act outside UK borders and the need for UK-connected organisations to keep a tight hold on their global operations. When the Act first became law in July 2011, organisations focused their attention - quite understandably - on putting in place appropriate internal policies to ensure their compliance. However, as HR professionals know more than most, it is important not just to have a policy, but to live by it. Had this company been able to demonstrate more robust policies, and practical approaches to enforcing them across its operations, it is likely the outcome would have been different.
It is important that issues such as bribery prevention are not seen as the preserve of compliance teams alone. Corporate culture and the ‘tone’ set by senior management are crucial, as is the role of HR in making sure key messages are communicated and enforced. An organisation’s policies and practices on staff issues such as discipline, dismissal, whistleblowing and confidentiality need to dovetail with an anti-bribery policy, particularly with regard to Section 7 of the Act.
The first step is having policies that are appropriately tailored for the organisation, and proportionate to the risks it faces. HR can help to reinforce standards, as its personnel are among the best-placed to communicate an organisation’s culture and behavioural standards to staff early on in the employment relationship. For example, they can undertake additional pre-employment checks and, once job offers are made, are at the forefront of recruiting candidates and getting their employment contracts signed. Both recruitment and induction offer critical opportunities to convey an organisation’s key values and conduct requirements, and can also facilitate consistency across the business.
Clearly, communicating a policy does not end there. Training is also vital to drive home the message, and organisations should continue to educate staff regularly on recognising bribery. Policies must be clearly enforced, and robust disciplinary responses and support for whistleblowers communicated quickly throughout the workforce.
All organisations with a UK connection should ensure they have done as much they can to check their activities are lawful across the world. Paper compliance is not enough. Employees should be regularly reminded of their obligation to maintain an anti-bribery culture.
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