Newsletter III/2010
Contents
Dear readership!
We would like to welcome you to the third edition of the Business Keeper newsletter in 2010. We have accumulated new information concerning business ethics, compliance and whistleblowing and hope to arouse your interest with our selection.
Enjoy reading!
Your Business Keeper-Team
1. Checklist for the effectiveness of compliance programs
The FCPA blog (Foreign Corrupt Practices Act) has published twelve questions, based on the U.S. Federal Sentencing Guidelines of 2005, to check the effectiveness of an organization’s compliance program. The clearly defined program shall promote a culture of adherence to laws with the goal to disclose and prevent illegal behavior. It has to be communicated within the organization and contain a system to handle anonymous reports: “The organization shall take reasonable steps to have and publicize a system, which may include mechanisms that allow for anonymity or confidentiality, whereby the organization’s employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation.”
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2. European resolution for whistleblower protection
The Parliamentary Assembly of the Council of Europe has passed a resolution for whistleblower protection in April. The delegates recognize the courage and determination of whistleblowers to point out false practices in their organizations for the society’s interest. The European states are called on to check and adjust their legislations to protect these whistleblowers. One important aspect is anonymity: “The identity of the “whistle-blower” is only disclosed with his or her consent…”
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3. Latest studies on whistleblowing
Medium-sized companies with up to 1000 employees are disproportionately victimized by occupational fraud, according to the Association of Certified Fraud Examiners (ACFE)’s study “2010 Report to the Nations“. It takes between 18 and 27 months to disclose these offenses – mostly with the help of anonymous reports. Occupational frauds are much more likely to be detected by tip than by any other means. Especially small organizations are typically lacking in anti-fraud controls and whistleblowing systems, which makes them particularly vulnerable to fraud.
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A study released in the New England Journal of Medicine in May shows that whistleblowers are mostly motivated by personal integrity, not by financial incentives. The finding is based on interviews with 26 US whistleblowers who received a share of financial recoveries through the disclosure of offenses of pharmaceutical producers in the years 2001 until 2009. Their incentives lay between 100,000 and 42 million US Dollars, in the average 3 million US dollars.
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4. Fight against corruption differs in OECD member states
According to the annual report of the Organisation for Economic Co-Operation and Development (OECD)’s Working Group on Bribery, only 13 of the 38 nations, that committed to fight the bribery of foreign officials, have imposed penalties over the 10 years since the Anti-Bribery Convention came into force in 1999. They sanctioned 148 individuals and 77 companies in total. For example, the USA have sanctioned 20 individuals and 20 companies whereas most parties to the convention, including the Netherlands, Australia and Spain haven't sanctioned any individual or company.
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5. Global investors call for disclosure on anti-corruption measures
A coalition of global investors has written to 21 major companies in 14 countries calling on them to improve their disclosure of bribery and corruption risks and avoidance measures. Companies from eight sectors - including defense, construction and capital goods - were contacted to explain whether their anti-corruption management systems adhere to international reporting frameworks. The investors behind this effort manage over US$1.6 trillion of assets in nine countries.
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6. Declaration of G-20 Toronto summit
In their declaration, the participants of the G20 summit focus on transparency in the financial system and measures against money laundering. Explicitly they request all G20 members to ratify und completely implement the UN Convention against Corruption. They agree in the opinion that corruption threatens the integrity of markets, undermines fair competition, distorts resource allocation, destroys public trust and undermines the rule of law.
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7. OECD guidelines for multinational enterprises are being revised
The OECD guidelines for multinational enterprises, existing since 1976, are currently revised again, ten years after the last revision. They contain recommendations for responsible entrepreneurial behavior concerning transparency, work relations, environment, corruption, consumer protection, technology transfer, competition and taxes in ten chapters. Organizations criticize that these are only recommendations without the imposition of sanctions.
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8. Impacts of corruption depend on gender
A working paper “Corruption and Gender in Service Delivery: The Unequal Impacts“ by Transparency International shows that corruption in the provision of basic services such as health and education can have disproportionate and negative consequences for women and girls. The systemic discrimination that poor women and girls already face – such as in education, justice, health care and jobs – is deepened when corruption becomes the currency for access.
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9. Events
EBEN Annual Conference 2010
September 9th - 11th, Trento, Italy
The European Business Ethics Network organizes its 23rd annual conference with the focus on “Which Values for which Organizations”.
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4th International Conference on Corporate Social Responsibility
September 22nd - 24th, Berlin, Germany
Relying on global exchange and scientific discourse, the conference seeks to identify professional trends in CSR and suggest options for responsible action in an increasingly globalized world.
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The Economics of Corruption - Lecture and Workshop in Good Governance and Reform
October 9th - 16th, Passau, Germany
Around 100 participants are expected from around the world, including students, practitioners and doctoral scholars. Guest presentations by internationally reputable speakers will enrich the interdisciplinary course.
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10. Literature
RESIST: Resisting Extortion and Solicitation in International Transactions International Chamber of Commerce, United Nations Global Compact, Transparency International, World Economic Forum
The collection of practical means for the prevention and adequate handling of solicitation and extortion demands shall help organizations in training their employees.
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Do you know about interesting literature, which we have not yet introduced? Please, let us know:redaktion@business-keeper.com
11. Quotation
Crises are best mastered by preventing them.
Walt Whitman Rostow (*1916), US-economist
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