ETHIC Intelligence - Anti-corruption compliance agency

Why companies choose to have their anti-corruption compliance programs certified

Companies choose to obtain certification of their anti-corruption compliance programs for various reasons, depending on their business strategy. For example, some companies wish to use certification to gain internal support for compliance programs and management rather than as a way to communicate anti-corruption compliance efforts externally. Others choose certification as a way to send a clear message to external audiences that their way of conducting business is more secure than, say, that of competitors engaged in the risky business of paying bribes.

Organizations exploring the benefits of anti-corruption compliance certification may consider any of the following arguments in favor of certification.

Anti-corruption compliance certification:

1. Increases visibility of anti-corruption commitments. Companies having implemented a corruption-prevention mechanism certified for its quality and effectiveness can not only more easily and convincingly communicate on the positive steps they’ve taken to prevent corruption, but can also prove that their efforts meet internationally-recognized standards as determined by an external, independent and qualified third party.
   
   In an era of increased public hostility towards corruption and fraud, it has become crucial for companies to prove their commitment to honesty and transparency. However, unlike other steps taken towards meeting Corporate Social Responsibility standards, companies find it difficult to communicate on their determination to ban corrupt practices, in that they must demonstrate credibly on what they commit to not doing (not paying bribes). Certification allows companies to promote their anti-corruption and anti-bribery compliance programs in a concrete, credible and positive way.
   
   
2. Fosters employee support for anti-corruption compliance programs. Companies wishing to obtain certification are obligated to position themselves clearly on the corruption issue not only externally, but also internally. Employees accept more easily strict, zero-tolerance rules and heavier anti-corruption policies when they feel that such rules and policies are necessary to obtain certification and not a sign of mistrust or questioning of employee integrity.
   
   In addition, employees are receptive to integrity issues and are likely more motivated when working within companies that share their values. Companies can use certification, which is essentially a third-party endorsement of anti-corruption commitments, to show employees the extent to which preventing corruption is important to executive management and what has been done concretely towards this end. It can also be used to attract highly qualified candidates who value ethics and integrity in their work.
   
   
3. Promotes a clear and identifiable standard for anti-corruption compliance policies and procedures. Anti-corruption compliance certification encourages companies to implement corruption-prevention policies and procedures designed not only to reduce legal risk, but also to gain a competitive advantage over others. Companies have an interest in differentiating themselves from their peers in order to gain a competitive edge vis-à-vis investors, customers, partners and other stakeholders. They also have an interest in being the first to set recognizable industry norms that competitors will feel constrained to meet in order to stay ahead.
   
   
4. Provides assurance of the quality of an anti-corruption program and a benchmark against other companies’ programs. Companies develop anti-corruption and anti-bribery compliance programs as best they can, according to the resources and specific anti-corruption expertise available to them. They may rely on their in-house legal or compliance department, their contacts with other companies, or external consultants to help them determine the design, scope and details on implementation of their compliance programs. Because an effective compliance program varies according to a company’s specific activity, structure, size, geographical location and other factors, a “one size fits all” compliance solution does not exist.
   
   Certification of anti-corruption compliance programs using ETHIC Intelligence methodology provides companies with assurance that their compliance programs are adapted to their specificities and up to international best practices standards. In addition, the ETHIC Intelligence certification committee - composed of highly-recognized experts in the field of anti-corruption - provides concrete recommendations for improvement of programs in view of evolving best practices standards. These recommendations are particularly useful for companies to anticipate areas of improvement and reinforce their existing compliance programs.
   
   
5. Provides standard target objectives for anti-corruption policies. In order to obtain certification, company anti-corruption policies must meet certain best practices standards that are measurable and recordable through time. Certification has an initial effect of raising and formalizing standards within the company itself (to obtain certification); it then creates incentives for the company to maintain or, if best practices have evolved, reinforce procedures (necessary for certificate renewal). For example, companies wishing to renew ETHIC Intelligence certificates must, at a minimum, maintain awareness of best practices as they evolve over time. Every year starting from the certificate’s award date, companies must assess the effectiveness of the policy and the implementation of certification committee recommendations on how to improve.
   
   
6. Helps lower insurance premiums. Having a robust anti-corruption compliance policy not only lowers the occurrence risk of corruption, but also company liability in the event of corruption by an employee, partner, etc. Certain insurance companies, such as Chartis and Marsh, have developed specific insurance products designed to cover corruption investigations for FCPA and SEC violations.
   
   Lowered risk means paying lowered insurance premiums on liability insurance, which can represent a significant savings over time. Certification offers proof to insurance companies that compliance programs have been properly designed and implemented, thus effectively lowering company liability risk and, consequently, insurance premiums.
   
   
7. Gives evidence to prosecutors of company compliance efforts. Whether during an investigation or a prosecution, certification provides judicial authorities with externally-verified evidence of the concrete steps taken by a company to prevent corruption. Because ETHIC Intelligence methodology includes an in-depth, on-site audit of compliance programs against terms of reference covering the highest standards internationally, ETHIC Intelligence certification has been cited by judicial authorities as evidence of a company’s commitment to compliance and as a reason for lowering the imposed fine.

Organizations can therefore compensate all or part of the cost of implementing an anti-corruption compliance program by having the program certified. Certification represents only a small fraction of the cost of designing, implementing and verifying an anti-corruption compliance program, yet it transforms this cost into an important investment: by allowing companies to improve their programs, promote their efforts both internally and externally, distinguish themselves from competitors and reassure not only investors but themselves on the quality of their programs.

How ETHIC Intelligence certification is different from others’

1. Thorough, on-site audits.  Unlike most other certification of anti-corruption compliance programs which are merely declarative, ETHIC Intelligence certification methodology includes thorough, on-site audits of compliance programs by accredited auditors. ETHIC Intelligence has entered into partnership with experienced and reputable inspection companies operating internationally, and conducts detailed anti-corruption compliance accreditation trainings for lead auditors.
   
   
2. Committee of experts. The decision to award or deny an ETHIC Intelligence certification is made by a highly reputable panel of experts whose members are well known in the field of anti-corruption compliance. Members have keen knowledge not only of the legal environment surrounding anti-corruption compliance, but also of the concrete, day-to-day business and organizational realities faced by companies.
   
   Members include: A co-author of the UK Bribery Act and guidance; a monitor appointed jointly by American and British authorities over a company prosecuted for FCPA and UK anti-corruption law violations; a chief legal advisor in the investigation of a high-level corruption scandal, and; the president of the Anti-corruption Commission of the International Chamber of Commerce.
   
   click here for a list of all ETHIC Intelligence certification committee members.
   
   
3. Chinese wall. In elaborating its certification processes and methodology, ETHIC Intelligence has done its utmost in avoiding any situation of conflict of interest that could jeopardize the quality of ETHIC Intelligence certificates. Audits are conducted by inspection companies through separate contracts and invoicing with the companies requesting certification; audits are invoiced whether the certificate is awarded or denied. The certification committee is entirely independent and each member invoices his examination of a file whether the certificate is awarded or denied. Committee members are required to explicitly state, in writing, they have no conflict of interest in reviewing a particular certification file. In no way is ETHIC Intelligence involved in conducting the audits or deciding on the award of certificates. As Chairman of the certification committee, Philippe Montigny – founder and CEO of ETHIC Intelligence – has a merely ­­formal role and can in no way participate in a decision made by the committee.
   
   
4. Terms of reference. Companies wishing to obtain ETHIC Intelligence certification must satisfy the highest international standards based on terms of reference which include: (1) Recommendations issued by organizations such as the OECD, World Bank, ICC and TI; (2) Administrative proceedings and guidance such as the US Federal Sentencing Guidelines’ 7 Steps, the UK Ministry of Justice’s Guidance for preventing bribery and the Italian 231 Law Decree (Modello 231); and (3) Practices adopted by a significant number of companies for their proven effectiveness. ETHIC Intelligence terms of reference also take into account the British Standard Institute's BS10500 standard on anti-corruption compliance. Criteria are regularly adjusted according to evolutions in international best practices, guidelines, recommendations and case law.
   
   Certification whose terms of reference cover the highest standards internationally allows companies to develop and implement compliance programs that not only lower the risk of corruption, but also adequately respond to requirements and guidance of the jurisdictions they are attached to. Conversely, certification provides authorities with externally-verified evidence of the concrete steps taken by a company to prevent corruption, thus aiding an investigation and/or prosecution.
   
   
5. Assessment adapted to company specificities. ETHIC Intelligence knows that there is no such thing as a “one size fits all” anti-corruption compliance policy. According to ETHIC Intelligence terms of reference and methodology, assessment of anti-corruption compliance programs takes into account such factors as company size, structure, organization, sector, geographical location(s), etc.
   
   The purpose of an ETHIC Intelligence assessment is not to size up a compliance program against a particular, fixed set of “best practices standards”, but rather to determine whether the company has correctly evaluated its corruption risks and has developed and implemented a program that effectively addresses these risks.
   
   Truly effective compliance programs vary from company to company; however, to obtain ETHIC Intelligence certification, all anti-corruption compliance programs are required to include: 1. Information; 2. Training; 3. Tools; 4. Control. These four basic criteria are not only inspired from programs to prevent industrial workplace accidents, but also cover recommendations put forth in the UK Bribery Act guidance, the US Federal Sentencing Guidelines’ 7 steps and the Italian Law decree 231.
   
   
6. Expert recommendations. In all major stages of the ETHIC Intelligence certification process, clients benefit from expert recommendations tailored to their specific anti-corruption compliance programs.  Companies whose programs are not deemed sufficient by ETHIC Intelligence to undergo a certification process receive recommendations on how to improve their programs for resubmittal. The auditor includes detailed recommendations for improvement of compliance programs in its final report. The certification committee members involved in assessing a compliance program also provide important recommendations not only on how to improve a program, but also how to anticipate evolving best practices. All recommendations are useful and significant in establishing target objectives and ensuring continuous improvement of a compliance program.

Certificate types

ETHIC Intelligence certificates are applicable to any legal entity or procedure, large or small, located within or outside of the OECD area. Such legal entities or procedures may include:

• Companies, subsidiaries, business units
• Specific compliance processes such as those for sales agents, gifts and invitations, mergers and acquisitions, etc.

Active AC Certificates (for compliance programs) attest that a company has appropriately assessed its specific corruption risks and developed and effectively enforces an anti-corruption compliance program adapted to these risks.

Specific AC Certificates (for compliance policies) attest that a company has developed and effectively implemented a specific anti-corruption compliance policy to prevent corruption (sales agents, gifts and invitations policies, etc.), which includes an appropriate risk analysis.