Minimising Your Exposure to Corruption While Expanding Overseas

One increasing concern for global business is avoiding corruption during international business expansion. In uncertain times, businesses are increasingly focused on compliance, anti-corruption and anti-bribery.

Companies doing international business must increase their attention towards anti-bribery and all anti-corruption scenarios, especially when they are operating in parts of the world that are particularly prone to such behaviours. And there are a number of ways to do this.

First, companies should assess the level of corruption risk in the country they are expanding to or operating in, and set a strict standard of behaviour and principles, and apply them across the company globally – this should send out a strong message to all stakeholders.

It is also important to verify the track record of outsourcing providers, local agents, distributors and intermediaries, and exclude any companies with convictions for corruption offences. Due diligence is a vital part of expanding your business, but it is especially important when you are entering into any sort of arrangement with an organisation or individual whose background you have not already researched.

The direct approach should be taken here. It’s advised to ask third parties outright about their own policies on avoiding and detecting bribery and corruption. An insufficient answer will help you know who to eliminate upfront, saving the business on time and money. Also, if companies already have comprehensive reporting systems and procedures in place for preventing corruption, there’s potential for you to learn from their approach.

Businesses should also apply a proper anti-corruption policy adapted to the industry or sector they operate in, using benchmarking and risk assessment, and regularly educate and train local employees and management on anti-corruption policies.

These training sessions should be carried out in employees’ native language, to ensure that no nuance, context or vital information is lost in translation. Not only does this decrease the risk of employees becoming involved in corruption due to not being able to recognise it, the business is also less likely to be held liable if any unethical behaviour does occur in the future.

You should also ensure internal audits are carried out regularly and provide a follow-up to verify that policies are being properly adhered to – as well as ensuring that the frequency of these audits are properly and widely communicated within the business. These audits should be regularly scheduled and documented to show your company’s commitment to anti-corruption measures.

The risks of corruption are, of course, bigger when companies operate in multiple countries and with several supply chains. But consistent, independent monitoring will greatly lower the risk, as well as doing everything possible to ensure you build and maintain an anti-corruption culture across the entire organisation, from management to the frontline.

Avoiding corruption isn’t a one-time effort – it requires constant vigilance and proactivity. Every time you expand your business, you will inevitably interact with new partners, and this means you will run the risk of encountering corruption.

For advice on how to ensure your business avoids corruption, it’s recommended you seek out expert advice. Galvin International is on hand to help at every stage of expanding into international market, including expert advice on global payroll compliance. Get in touch with us to find out more.



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