What are the Stages of ISO 37001 Certification?

The ISO 37001:2016 Certification is an Anti-Bribery Management System Certification critical for organisations in the public, private and non-profit sectors. After all, consider the benefits: Certification adds a distinct level of credibility to the organisation’s management systems and ensures that the organisation implements a viable anti-bribery management program utilising widely accepted controls and systems. It assures management, investors, business associates, personnel and other stakeholders that the organisation is actively pursuing internationally recognised and accepted processes to prevent bribery and corruption. ISO 37001:2016 certification also protects the organisation, its assets, shareholders and directors from the effects of bribery. But what, exactly, is the process for getting ISO 37001:2016 certified by CRI Group? Once your organisation has submitted questionnaire information and completed the approval and contract stage, the certification cycle is ready to begin.

A Breakdown of the Stages of ISO 37001:2016 Certification

Step 1: Audit Confirmation

An audit plan will be developed with your organisation and confirmed to the Certification’s Body Assessment Team at least three months before the organisation’s first audit.

Step 2: Pre-assessment Audit (optional)

The organisation can opt to perform a pre-assessment audit to identify any possible gaps between its current management system and the standard requirements. This audit is optional and helps the organisation check its preparedness for the stage 1 and 2 assessments by identifying any major non-conformities that have not been addressed.

Step 3: Stage 1 Audit

Review the results of the audit, including:

• General observations
• Non-conformities (major or minor, see below)

Minor Non-conformities: 

These are not seen as serious. The organisation must complete an internal Corrective Action Plan (CAP) before Stage 2. CAP is not required to be sent to the Assessment Team at Stage 1.

Major Non-conformities: 

These are more serious. The organisation will need to submit a CAP within ten days of receiving the audit report, with all actions scheduled to be completed before Stage 2. The CAP should be sent to the Assessment Team. The major non-conformities raised during Stage 1 will be re-assessed during Stage 2 Audit.

Step 4: Stage 2 Audit

This is an on-site audit and takes place after the organisation has successfully completed Stage 1 and corrected any major non-conformities identified during the Stage 1 audit. Stage 2 confirms that the organisation’s management system is fully aligned to the standard. The evaluation is of management system implementation and its effectiveness.

Outcome: The audit report will detail the following:

• Any positive observations
• Opportunities for improvement – suggestions for improvement and any findings that could lead to potential non-conformities.
• Non-conformities (Major or Minor)
• Recommendation for Certification

Minor non-conformities: The organisation must complete an internal Corrective Action Plan (CAP) and submit this to the Assessment Team within 45 working days of receiving the audit report. The Assessment Team will review the CAP; it must detail the non-conformity, the cause, the proposed corrective action, who is responsible and the date the action will be implemented. Based on the evaluation of CAP, the recommendation for certification will be made.

For minor non-conformities, if an organisation has a corrective action procedure, this will not delay the certificate.

Major non-conformities: The organisation must complete an internal Corrective Action Plan (CAP) and submit it within 90 days (or 180 days depending on the number and risk of major non-conformities) of receiving the audit report be sent to the auditor.

What Comes Next?

Stay tuned for more on ISO 37001:2016: sign up for our newsletter HERE! ISO 37001:2016 Anti-Bribery Management System certification is offered under CRI Group’s ABAC™ Centre of Excellence, an independent certification body established for Anti-Bribery Management System training and certification, ISO 37301 Compliance Management Systems and Risk Management System certification. The program will be tailored to your organisation’s needs and requirements. For assistance in developing and implementing a fraud prevention strategy, contact ABAC™ today or get a FREE QUOTE now!

Who is CRI Group™?

Based in London, CRI Group™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group™ also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

Filed under: Anti-Bribery Anti-Corruption Solution, Industry Insights, ISO 37001, Resources by admin
No Comments »

The Consequences of Inadequate Due Diligence

Adequate Due Diligence

Running worldwide businesses requires effectively recognizing, analyzing and managing risks and ensuring compliance. We have identified that many organizations with third-party relationships conduct inadequate due diligence that might pose significant risks. In this article, we look at the possible risks and the best practices for conducting adequate due diligence and third-party risk management effectively, such as:

1. Planning
2. Documentation
3. Culture

Continuous Risk Management

Today’s global business requires efficiently managing a network of third-party partners that supply product components, run operations in foreign markets, operate call centers, or act as outside consultants or agents.

A well-maintained third-party network’s vast array of capabilities and specialized skill sets make operations easier for the organization and its customers. But many organizations, from small businesses to multi-national corporations, can rarely afford the time and effort required in-house to manage these often-complex third-party relationships.

Because of this, the risk of unethical business practices, bribery and other business corruption potentially increases if inadequate due diligence is conducted on third-party partners. The ramifications of a scandal related to a third-party partner can easily take down an organization, resulting in such risks as a damaged reputation and brand devaluation, regulatory violations, legal proceedings and possible fines and jail terms for directors. Therefore, a solid and viable third-party risk management program is the only way to protect the corporation’s assets fully.

Building a third-party risk management program is not a passive process. It continually requires time and effort as the risks associated with third-party partnerships evolve.

Explore Third-Party Risk Management Solutions

Consider the recent events during which the legislators of three separate nations signed new compliance regulations and standards into law. Suppose your organization’s third-party risk management program cannot quickly adjust to these new regulations (or is not designed to anticipate future legislative movements). In that case, your organization is genuinely at risk.

Cutting Corners Not Worth the Risk: Adequate Due Diligence

Indeed, building a solid risk management program requires a significant investment of time and resources (internally and from the outside). Still, the consequences of not doing it right could be dramatically severe. Still, far too many organizations are willing to tempt fate by cutting corners on developing and implementing their third-party risk management program.

Organizations attempt to cut corners by relying on outdated or stagnant tools to monitor, detect, and prevent risks. Hiring outside industry professionals with proven track records of successful due diligence experience is necessary.

Relying too heavily on “desktop” due diligence is another dangerous shortcut. Desktop due diligence is an essential initial step of the investigative process, involving background checks, lien searches, regulatory filing investigations and environmental reports. And while it is a vital component of any effective due diligence program, it’s not nearly enough to evaluate the third party thoroughly.

Truly understanding a potential partner’s business requires a considerable amount of time spent face-to-face with the outside organization’s leadership, operations management and even current customers. This “boots on the ground” process will detect potential risks, often hidden from a distance and undetectable via web-based discovery tools.

The “boots on the ground” approach also help to establish a relational dynamic required for ongoing negotiations and provides a clear insight into two of the fastest-growing issues in third-party risk management: Bribery and Labor Management.

Bribery As a Compliance Issue

Anti-bribery and anti-corruption compliance is a fast-moving target. New anti-bribery laws and regulations are being decreed worldwide at a relentless pace. Complicating matters further, many countries may have laws in place but cannot enforce them adequately. The responsibility falls to your organization’s adequate due diligence program to ensure detection and protection when this happens.

High profile investigations in recent years have contributed to the rapid emergence of bribery and corruption as a societal issue. Never before has such a contrast been drawn so dramatically on a global stage between those who engage in corruption and those who suffer. Any organization that finds itself mixed up in a scandal involving bribery has more than a legal mess. It has a long battle to win back the trust of its shareholders, employees, customers and the public.

Conducting adequate due diligence surrounded such varying factors is work that must be completed in person. Gaining insight into a potential partner’s company culture requires immersion with the organization’s leadership, management and staff. When evaluating bribery risk, some warning signs can only be discovered on-site.

This e-book explores some critical questions posed to business leaders today: Has your organization implemented reasonable and proportionate measures to prevent bribery? How will you know if your anti-bribery and anti-corruption controls are effective? Are you aware of the latest best practices in avoiding bribery? Download our eBook to find out! READ NOW

Labor Matters and Compliance

From overtime issues and under-age workers to unsafe working conditions and improperly documented accidents, labor compliance represents a significant component of any solid third-party risk management program.

Once again, inadequate attention to risks related to labor compliance can bring on considerable penalties. Understanding which industries, geographic regions, and management structures elevate the organization’s risk is vital to efficiently operate an adequate due diligence program. This understanding is nearly impossible to guarantee via ‘desktop’ due diligence. Spending the necessary time in person is the only way to ensure a potential supplier properly compensates and manages employees while providing a safe workplace environment.

Even if your agreement with a third-party partner places the responsibility of payroll issues firmly upon the vendor, your organization — as a joint employer — can still be held accountable in many countries. After all, the labor conducted at your partner’s facility benefits your organization’s bottom line.

What are the Best Practices?

The demands of identifying and measuring third-party risk, monitoring those potential risks on an ongoing basis, and making recommendations based on empirical research are best met by a dedicated team of outside professionals. And while no two organizations are alike in terms of risk profiles, several factors have become consistent in building a strong, effective and adequate due diligence program:

1. Planning: Without a well thought out plan outlining ongoing monitoring efforts with assigned roles and responsibilities, measures to mitigate risk will be haphazard at best and dormant at worst. With a thoroughly established, management-advocated program that identifies specific risk factors for each affiliation, a process for addressing red flags, and an established mechanism for continual revision, the organization will remain vigilant in its efforts to protect itself from liability.

2. Documentation: Due diligence efforts are only as good as the information and data gathered and secured. Meticulous documentation and reporting enable the organization to recognize trends, communicate analyses, and sustain efforts during any future personnel changes. Effective risk management programs feature established guidelines for capturing data, contracts and research with uniformity.

3. Culture: An organization where leadership, management and workforce do not take the third-party risk seriously will never be adequately protected from risk. Successful organizations in this respect dedicate themselves to building a culture in which every employee feels personally invested in the operation’s risk management. Employees must feel empowered and encouraged to report red flags. Passive engagement is simply not enough.

Done correctly, third-party risk management can effectively save the organization from risk, liability, and other perils often associated with outside entities wanting to engage and transact with your business.

A TPRM Customized Solution that Best Suits Your Needs

CRI Group™’s own exclusive, expert-developed 3PRM™ services help you proactively mitigate risks from third-party affiliations, protecting your organization from liability, brand damage and harm to the business. Whether your organization has a large, well-established third-party program, is in the early stages of development, or is anywhere in between, the 3PRM™ solution can improve the health of your program and future-proof your entire business in many forms.

Our 3PRM™ solution streamlines the third-party risk management process through scalability, and efficiencies – from third-party risk identification to assessment what sets us apart is that our 3PRM™ solution includes:

• Due Diligence
• Screening & Background Checks
• Regulatory Compliance
• Business Intelligence: Information Management
• Investigations: i.e. IP, Fraud, Conflict of Interest, etc.
• Anti-bribery & Anti-Corruption (ABAC) Compliance
• Employee auditing training & education
• Monitoring & reporting

Where Should TPRM Sit within an Organization?

TPRM can sit within various business units depending on your organization’s structure. Many organizations involve multiple departments such as procurement, information security, operational risk and compliance to provide input to manage the risks related to engaging third parties. Depending on your business’ internal structure, you may choose to apply a centralized, mixed or decentralized model when focus on TPRM. At CRI Group™ we observed a trend with many of our clients implementing a centralized model when managing their third-party relationships, given the required input from their multiple business lines. A centralized model allows you as an organization to track common risks across departments and identify emerging trends that may require a response from more than one department.

Risk Management Goes Beyond TPRM

CRI Group™ provides the knowledge required to navigate unfamiliar markets and mitigate third party risk by assessing the backgrounds, integrity and character of those with whom you do business. Our 3PRM-Certified™ program is therefore key for managing an organization’s third party risk levels. However, this is only one of the several vital steps towards a robust risk management strategy implementation.

Risk management is the identification, evaluation, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from various sources including your employees.

Getting Started with ISO 31000 Risk Management? Learn more with our “ISO 31000 Playbook”

At CRI Group™, we understand that managing compliance and risk activities might be a daunting task. That’s why we present you with the insights library where you can dive deep into these topics to make your job easier. If you can’t find what you are looking for, just get in touch – we would love to have a chat!

CONTACT INFORMATION

Zafar Anjum | CRI Group™ Chief Executive Officer
t: +44 207 8681415 | m: +44 7588 454959
e: zanjum@crigroup.com

Filed under: Due Diligence, Industry Insights, Resources, Third-Party Risk Management by admin
1 Comment »

ILO Monitor: COVID-19 and the world of work, 2nd update

ILO (International Labour Organization) has updated “ILO Monitor: COVID-19 and the world of work. Second edition”. Since the first edition, the COVID-19 pandemic has further accelerated in terms of intensity and expanded its global reach. According to ILO, full or partial lockdown measures are now affecting almost 2.7 billion workers, representing around 81% of the world’s workforce. Leaders and businesses across a range of economic sectors are facing difficult decisions, as COVID-19 is changing their business. There are many cases where COVID-19 has prompted innovative leadership in an attempt to avoid catastrophic losses, and a potential end to operations and or even solvency.

COVID-19 crisis is leaving millions of workers vulnerable to income loss and layoffs. According to ILO new edition, employment contraction has already begun on a large scale in many countries. Changes in working hours (which reflect both layoffs and other temporary reductions) reflect the new reality of the current labour market situation. As of 1 April 2020, the ILO’s estimates that global working hours will decline by 6.7% in the second quarter of 2020, which is equivalent to 195 million full-time workers. 

The ILO estimates that 1.25 billion workers, representing almost 38% of the global workforce, are employed in sectors such as retail trade, accommodation, food services, and manufacturing. Dues to Covid-19 crisis these are sectors that are now facing a severe decline in output and consequently a dramatic impact on the world’s workforce. The workforce in high risk of displacement will experience greater challenges in regaining their livelihoods during the recovery period. 

>Read the full report here!

ILO discusses how policy responses are critical now in order to provide immediate relief to workers and enterprises and protect livelihoods and economically viable businesses. According to the ILO report, the final tally of annual job losses will depend on how much longer will COVID-19 continue to impact the world and whatever measures taken to mitigate its impact. Stay updated, subscribe for more insights like these! 

Managing your people through COVID-19

The COVID-19 pandemic is undeniable affecting the world. And the situation is changing at an hourly rate as we go into a second global lockdown. Businesses are having to adapt quickly to survive, i.e. cutting steps in their hiring process, and no-one knows how this will play out. However, there are ways you can mitigate the impact, learn how with this FREE ebook. Taken as a whole, this ebook is the perfect primer for any HR professional, business leader and companies looking to avoid employee background screening risks. It provides the tools and knowledge needed to stay ahead of COVID-19 effectively. Read the answers to the following questions:

• How to turn the tide’ on coronavirus crisis?;
• COVID-19 Action point checklist;
• Background Screening: Essential Checks;
• Six steps for good practice in connection with COVID-19;
• 11 Steps to Reduce Personnel Costs;
• COVID-19 General advice;
• How to remove any danger to your business during COVID-19;
• … and more!

> Download your “Employee Screening during COVID-19: everything you need to know and more!“ FREE ebook here![/vc_column_text][accordion_father][accordion_son title=”Who is ILO?” clr=”#ffffff” bgclr=”#1e73be”]The ILO was founded in 1919, in the wake of a destructive war, to pursue a vision based on the premise that universal, lasting peace can be established only if it is based on social justice. The ILO became the first specialized agency of the UN in 1946.[/accordion_son][accordion_son title=”About CRI Group” clr=”#ffffff” bgclr=”#1e73be”]Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][/accordion_father]

Have you read…

[/vc_column_text][vc_basic_grid post_type=”case-study” max_items=”6″ style=”pagination” items_per_page=”3″ item=”234″ grid_id=”vc_gid:1605683277613-8a07ec62-1f1d-4″][/vc_column][/vc_row]

Filed under: All Industries, All Regions, COVID-19 Insights, Industry Insights, Resources by admin
No Comments »

Debugging fears that paralyse fraud prevention

Debug fears for fraud prevention

Even though companies understand the fraud risk factor – nearly 77 per cent of HR professionals accept that there is a risk that employees can initiate fraudulent activity because of the work-from-home arrangement during the pandemic – more often than not, companies do not take action to implement robust fraud prevention processes in place until the organisation is exposed to fraud or appear in the news due to an investigation, incident, or external and (or) internal violation. Based on the article by ACFE, we aim to answer why companies wouldn’t adopt fraud prevention and detection measures proactively. 

The answer is fear. It prevents business leaders from being proactive about fighting fraud. Business analytical tools and systems enable companies to identify red flags quickly, but they do not work as fraud prevention tools. 67 per cent of CRI® Group’s background screening survey respondents said they encountered one type of fraud – employee fraud – in their career. It’s alarming to imagine how others have encountered many other types of fraud. And still, companies pay lip service to efforts to fight fraud. So how the fear factor plays into the decision to fight fraud?

Fear of associated expenses

A fraud prevention tool is a cost you don’t always recognise an immediate return. Consider it like health or car insurance – when it comes to identifying and preventing risk and potential fraud, returns can be harder to quantify.

There are some concerns about spending money on a system that might or might not identify fraud. And if the system does identify fraudulent activity, companies are now obligated to spend more for the additional investigation and possible litigation. It might not be a significant expense for some large organisations, but the budget is better reinvested toward a company’s bottom line.

When trying to save their expenses, organisations forget that expense fraud is one of the most common forms of occupational fraud: employees fudging on their expense accounts. Earlier this year, Lookers (A London-listed company) warned investors they might be unable to buy and sell its shares from the beginning of July because of potential fraud on its books – confirming a £19m charge to correct books after fraud inquiry. Whether through fictitious charges, fake receipts or invoices, or other improper use of expense funds, an expense account is sometimes seen as a low-risk, high-reward area for fraud. It shouldn’t be. Follow these five tips for preventing and detecting expensive fraud.

Fear of technology

Based on ACFE, “companies are concerned that implementing new software technology might increase their exposure to fraud via data breaches. They’re also concerned that technology will replace internal auditors. While data encryption and similar tools can combat the risk of data breaches, addressing personnel concerns are trickier.” Technology is meant to assist but not to replace people. It helps identify the red flags, but human input and investigation are required to determine if fraud is occurring and check the facts. 

Appointing a fraud investigator is a good idea in this case. Fraud investigators are the front line of establishing the facts of suspected fraud or other unethical business behaviour. A fraud investigator’s skillset and wide knowledge of fraud laws, evidence gathering, and interviewing make them the go-to expert for investigating insurance fraud, financial fraud, procurement fraud, asset recovery, cyber fraud, healthcare fraud, retail fraud, etc. In this article about fraud investigators’ role, we explore their key functions, responsibilities and knowledge, and how their skillset helps organisations.

Fear of reputation loss

“Companies might fear their reputations will take a hit if they uncover ongoing fraud schemes. Social media has become a prevalent form of information sharing, so all it takes is the hint of a rumour, and the damage is done. Employees might post the information — or alleged information — that makes it appear as though a company is attempting to hide something”, based on ACFE. This comes as the company’s advantage to be open with employees to fight fraud. Employees are less likely to whistleblow in public when they are safe and have internal options to report fraud and discrepancies.

The key ways of managing the company’s reputation are being transparent, protecting data, and conducting due diligence. It may sometimes feel like your company’s reputation is out of your control. However, you can take steps to help manage your reputation and help steer the conversation. It becomes more difficult when you wait and try to undo later the damage that has already been done. That’s why being proactive in maintaining a positive reputation is the best strategy.

Fighting fraud on the front line is key

Companies must realise that the benefits of fighting fraud far outweigh the fears. Engagement in an early fraud education process acts as a buffer, leading to fewer fraudulent losses. Procurement and payables professionals must implement efficient processes that address red flags and track — early and upfront — non-adherence to mandates. Below is a quick overview of best practices for engaging analytic tools and front-line staff to identify and prevent fraud.

• Tone at the Top: Of course, top-level management must be committed to addressing fraud prevention. However, it’s just as important for middle managers to adopt a zero-tolerance policy toward fraud. A lack of integrity can be contagious. If workers see their supervisors’ rubberstamping processes, it gives them little incentive to raise concerns when they find inconsistencies.
• Segregation of duties: No one should be responsible for an entire accounting function. The individual who sets up a vendor or client shouldn’t be the same person who approves invoice payments. It’s vital to have multiple eyes on the process, especially in smaller organisations where segregation of accounting duties might be limited or non-existent.
• Create a fraud-fighting culture: The very perception of detection helps prevent fraud. A fraud-prevention overview should be part of new employee orientation. Companies also should sign off on internal codes of ethics that outline the steps and procedures employees can take if they suspect fraud. Tips are consistently, and by far, the most common detection method. According to the Report to the Nations, tips detected more than 40 per cent of all cases. Publicise a hotline number internally and externally for your vendors — one of your employees might even be seeking to collude with a client!
• Training and process audit: Perform anti-fraud training for employees annually, at a minimum. Increase your anti-fraud training if you have a substantial number of new employees coming on board. Annual fraud awareness and detection training sends a clear message to employees about your organisation’s high standards and could deter fraudulent activity. Vet suppliers and clients. If you want to avert various fraudulent schemes, you must understand the red flags to look for when onboarding a supplier or client. Vendor vetting in real-time can mitigate upfront risks and dictate those actions required to prevent fraud from slipping undetected through the system. Vendor portals prove invaluable for vetting suppliers using automated data validation.
• Take action: There’s no reason to identify or perform analysis if you’re unwilling to take action. Fraud prevention software can help you do more than detect fraud — it can highlight poor processes that might expose you to fraud. For example, you might have a legitimate vendor or client, but software can raise a red flag because of gaps in your setup process. Analyse results, make changes, monitor and constantly learn from your processes.

Don’t let fear take control

We must help diminish the fears that impede the fight against fraud. At CRI® Group, we know that we can effectively and together use the needed resources to combat them when you acknowledge those fears. We believe that analytics tools and proactive monitoring can turn idle threats into reality.

Your business is at far greater risk for losses due to fraud than organisations that take advantage of fraud prevention tools to leverage their resources: the larger the organisation, the more complex and multi-faceted the governance and responsibility matrix for fraud detection. Passive detection methods aren’t enough anymore. It’s been proven repeatedly that instilling proactive efforts to discover or reduce fraud will increase the bottom line and enhance a company’s reputation. Our fraud examiners can assist you, don’t allow fear to paralyse you into inaction.

Free E-Book | Risk Management & ABMS Playbook

The Risk Management & ABMS Playbook provides tools, checklists, case studies, FAQs and other resources to help you lead your organisation into better preparedness and compliance. Our experts share their plays to help you reduce risk, thereby preventing and detecting more fraud.

The first section addresses risk management directly: proper third-party due diligence and critical background screening take centre stage for this game plan. Section two tackles bribery and corruption, with tried-and-true measures you can implement to stay better protected and comply with strict laws and regulations.

DOWNLOAD FREE EBOOK

About CRI® Group

Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI® Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI® Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

CONTACT CRI® GROUP

Speak up | Report Illegal, Unethical or Improper Behaviour

If you find yourself in an ethical dilemma or suspect inappropriate or illegal conduct, and you feel uncomfortable reporting through normal communication channels or wish to raise the issue anonymously, use CRI® Group’s Compliance Hotline. The Compliance Hotline is a secure and confidential reporting channel managed by an independent provider. When reporting a concern in good faith, you will be protected by CRI® Group’s Non-Retaliation Policy.

COMPLIANCE HOTLINE

Filed under: All Industries, Global, Industry Insights, Resources by admin
No Comments »

The Unseen Enemy: Insurance Fraud – Part I

This three-part series of articles examines the problem of insurance fraud, including its pervasiveness and general characteristics in the United States, the United Kingdom and the world. Insurance fraud is a widespread problem that requires real solutions and is often difficult to detect and combat.

Part One of the series, “What is Insurance Fraud,” provides an introduction to a topic that is important for any business leader, insurance professional, compliance agent or fraud investigator. Part Two, “How do Companies Detect Insurance Fraud,” details red flags of insurance fraud that help tip off investigators to possible illegal behaviour. Part Three, “Anatomy of an Insurance Fraud Investigation,” provides a look at case studies and reveals key tips for handling a successful investigation. To receive the next series subscribe to our monthly newsletter subscribe now!

Taken as a whole, this series is the perfect primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraudulent claims. It provides the tools and knowledge needed to effectively combat insurance fraud.

Insurance Fraud Consequences Around the World

Fraudulent claims costs an estimated $40 to $80 billion per year in the U.S. alone. According to Cifas, the UK’s leading fraud prevention service, members report a 27% rise in false insurance claims across the UK in the past year, with spikes in household and motor insurance. Cifas members also reported the following:

• Household insurance fraudulent claims have increased by 52%, with claimants aged 31-40 the biggest culprits
• motor insurance fraudulent claims have increased by 45%, with 21-30 year-olds making up the largest group
• Fronting insurance is on the decline overall, however the share of millennials (21-30 year-olds) committing the offence increased by 18% in 2018.

Fraudulent claims are deliberately undetectable, therefore it’s hard to place an exact value on the money stolen. According to Alfred Manes’ “Insurance Crimes” in the Journal of Law and Criminology, the official number of cases does not correlate with the reality. The Coalition Against Insurance Fraud Annual Report estimates that a total of about $80 billion was lost in the US in 2006. 

• Insurance Information Institute estimates that the insurance fraud accounts for about 10% of the property insurance industry’s incurred losses and loss adjustment expenses.
• The National Health Care Anti-Fraud Association’s “The Problem of Health Care Fraud” estimates that 3% of the health care industry’s expenditures in the U.S. are due to fraudulent activities, amounting to a cost of about $51 billion.
• David A. Hyman writes in “Health Care Fraud and Abuse” estimates that 10% of the total healthcare spending in the US to fraud—about $115 billion annually. 

Consider these statistics:

• According to Federal Bureau of Investigation’s “FBI — Insurance Fraud,” non-health insurance fraud costs an estimated $40 billion per year – consequently this increases the premiums for the average U.S. family between $400 and $700 annually. 
• J.E. Smith’s book “The Trillion Dollar Insurance Crook” puts the true cost fraud committed in the US at 33% to 38% of the total cash flow through the system
• In the UK, the Insurance Fraud Bureau estimates that the loss due to insurance fraud is about £1.5 billion ($3.08 billion), causing a 5% increase in insurance premiums
• Insurance Bureau of Canada “Cost of Personal Injury Fraud” estimates that personal injury fraud costs about C$500 million annually.
• “Indiaforensic Study on quantification of fraud losses to Indian Insurance Sector” estimates that Insurance frauds in India costs about $6.25 billion annually.

Part One: What is Insurance Fraud?

It’s been called an epidemic and is a scourge of insurance providers, private companies and consumers alike. But what is it, how do companies detect it, and how does an insurance fraud investigator unravel it? In this part one of a three-part series, we will address the first question: What is insurance fraud?

Most of us deal with insurance in various forms throughout our lives. It’s a necessity in some cases through which we pay regular premiums in order to be protected from damages or liability from an unknown future event, such as an accident or illness. For large corporations, insurance can be worth millions, covering things like product liability, workers’ compensation, business interruption and other serious risks. It’s also rife for fraudsters, who often live by the well-known maxim, “follow the money.”

Don’t have time to read the rest?

Taken as a whole, this ebook is the perfect primer for any insurance fraud professional and companies looking to avoid becoming victims of insurance fraud claims. It provides the tools and knowledge needed to effectively combat insurance fraud.

Download your Insurance Fraud Investigations FREE ebook here!

Every type of insurance is vulnerable to insurance fraud. This type of cases can be committed by opportunists – consider claim fraud, where perpetrators invent or exaggerate a claim; or application fraud, where they deliberately or recklessly provide false information when applying for insurance. There are well-known fraudulent insurance claim cases of highly organised criminal gangs with money-making enterprises based on motor-vehicle fraud or health care fraud, for example. But fraud can happen at any point along the process of an insurance claim, by insurance applicants, members/policyholders, third-party claimants or others (including professionals who specialise in pursuing claims for policyholders).

Fraudulent claim cases also cover a wide range of schemes and crimes. The following are some of the most common types of fraud involving the insurance industry, according to the ACFE’s “Insurance Fraud Handbook”:

• Agent and broker schemes
• Underwriting irregularities
• Vehicle insurance schemes
• Property schemes
• Life insurance schemes
• Liability schemes
• Health insurance schemes
• Worker’s compensation schemes

Fraudsters find new ways to pull off their scams, from simply falsifying claims to engaging in mail fraud, identity theft, and forgery, they will make it happen. For example, when looking at just motor vehicle-related fraudulent claims, the types of schemes include the following:

• Vehicle dumping or destroying
• False registration
• Exaggerated repair costs after a car accident
• Faulty airbag replacement
• Faulty windshield replacement

All of the above is intended to enrich the fraudsters at the expense of insurance providers, and, in some cases, other innocent victims. People have even been injured in schemes that involved faked traffic accidents for the purpose of insurance fraud.

Who is Involved?

Often committed by someone directly connected to the insurance policy. This includes the policyholder, applicant and their beneficiaries. However, insurance insiders – i.e. brokers and agents- as well as gatekeepers – i.e. lawyers and accountants, could be behind the scheme. They collude with the policyholder in exchange for a portion of the profits or victimize the policyholder for their own gain. Examples include:

• A doctor submitting improper medical coding to receive a higher payment than they are entitled to.
• A mechanic fabricating a bill for more repairs than the car required after an accident.
• A private investigator not really doing the investigation on fraudulent behaviour.
• An attorney was helping a claimant fabricate a story about how they hurt themselves on the job so they can receive worker’s compensation.

When times are tough for them financially, people are more likely to commit insurance fraud. You can sometimes discover opportunistic fraud by interviewing the alleged fraudster’s friends or neighbours about their financial situation.

Case Study: The ‘Phantom Collision’ Ring

In 2014 in Los Angeles, a ring of over a dozen insurance fraudsters was busted for fraudulent collision claims. The perpetrators of the frauds recruited family members and friends to help orchestrate fake accidents, ultimately stealing more than $300,000 from auto insurance companies before they were caught.

In some cases, the collisions didn’t even happen at all. All it took were willing participants to make claims in coordination with repair and auto body shops to make the fraudulent claims. In the end, fraud investigators were able to detect a pattern to their claims, helping them unravel the scheme.

The case is reminiscent of a similar instance that made shocking headlines in 1996 when an organised crime ring (also in L.A.) made up of six perpetrators netted a jaw-dropping $20 million in phoney claims. When they were caught, it was discovered that they had staged more than 100 fake accidents, filing $10,000 to $20,000 in claims per incident. For many people who read about the case in the newspapers, it was their first exposure to something of this magnitude, whereas they had previously thought of insurance fraud cases as “one-off” crimes of opportunity.

Case Study: Doctors, Clinics Get in on Insurance Fraud in New York

Healthcare fraud is another area that is susceptible to major fraud conspiracies. Last year in New York City, more than 20 people and more than a dozen corporations were charged in a massive scheme to defraud Medicaid, Medicare and other insurance providers. The operation was so sophisticated; it allegedly involved “office staff, recruiters, managers, billers and money launderers.”

As is common with such cases, the fraudsters targeted poor and vulnerable people to help them execute the fraud. They went into low-income areas and in some cases approached homeless people, offering them cash ($30 to $40) in exchange for them going into clinics that were in on the scheme and ordering unnecessary tests. In many cases, the tests weren’t even performed, and the “patients” didn’t even have a consultation with a doctor.

The massive fraud included doctors and utilised shell companies to help launder the millions of dollars that were processed by the perpetrators. The case, with 878 indictments, is still in the court system.

The Ten Most Common Types of Insurance Fraud

In case you think that fraud is limited to automobiles and healthcare, consider all of the types of insurance that are available – and know that all of them are susceptible to fraud. In fact, investigators from Business Insurance have provided a list titled “10 Most Common Types of Insurance Fraud.” These cases even include staged home fires and faked deaths: 

1. Stolen car
2. Car accident
3. Car damage
4. Health insurance billing fraud
5. Unnecessary medical procedures
6. Staged home fires
7. Storm fraud
8. Abandoned house fire
9. Faked death
10. Renter’s insurance

Investigating Insurance Fraudulent Claims are Best Left to the Experts

With the enormous liability presented by insurance fraud, every organisation should address the risk in their due diligence and fraud prevention programs. The best way to do that is to bring in the experts at CRI Group to help implement this as part of a risk management plan.

When fraud is detected, CRI Group’s investigations cover the full range of fraudulent claim cases, from health care fraud to disability and even fake death claims. CRI Group’s thoroughly trained experts are trained, for example, to look for the tell-tale signs of fraud carefully reviewing claims, medical and hospital records, conducting interviews, examining statements and documents and performing on-site inspections.

In Part Two, we will examine some of the tell-tale signs and red flags of fraudulent claims, and how insurance fraud investigation companies can have a better chance of detecting it before it causes irreparable damage. Like many criminal schemes, this type of cases are often well-hidden – the key is knowing what to look for.

Do you want to read the next series now? Not a problem, this three-part series of articles is part of our “The Unseen Enemy: Insurance Fraud” ebook with actionable advise on how to protect your business and much more. Download the FREE ebook here!

Filed under: Industry Insights, Insurance, Insurance Fraud Investigation, Investigative Solution, Resources by admin
No Comments »

The Little Book of Big Scams by MET

The Little Book of Big Scams was released in 2012 by The Metropolitan Police Service’s Operation and after its huge success the MET has released a new version. The Little Book of Big Scams is specifically designed to protect small and medium enterprises (SMEs). SMEs accounts for 99% of all UK businesses and employ over 13 million people, as they foster local economies, supporting neighbourhoods and communities – therefore, it is vital to protect these from fraud. The Little Book of Big Scams provides excellent guidelines on how to protect your business from fraud:

1. 10 top tips to help you fight fraud
2. Fraud myth busters
3. It can happen to you (case study)
4. Current fraud trends
5. Fraud prevention
6. Fraud strategy steps
7. Practical advice
8. 12 steps to take action to reduce fraud risk
9. Useful hints and relevant legislation
10. Business frauds you must be aware of 
11. Case studies: fraud does happen
12. How to report fraud

Read The Little Book of Big Scams now! The Metropolitan Police Service is the territorial police force responsible for law enforcement in the Metropolitan Police District (currently consists of the 32 London boroughs).

If you find yourself in an ethical dilemma or suspect inappropriate or illegal conduct, report it. 

Our Ethics & Compliance Hotline is an anonymous reporting mechanism that facilitates reporting of possible illegal, unethical, or improper conduct when the normal channels of communication have proven ineffective, or are impractical under the circumstances. This hotline is available to all employees, as well as clients, contractors, vendors and others in a business relationship with CRI Group and ABAC Group.

The Compliance Hotline is a secure and confidential reporting channel managed by an independent provider. When reporting a concern in good faith, you will be protected by CRI Group’s Non-Retaliation Policy. At CRI Group, we are committed to having an open dialogue on ethical dilemmas regardless.[/vc_column_text][/vc_column][/vc_row][accordion_father caption_url=””][accordion_son title=”About CRI Group”]Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][/accordion_father][vc_empty_space][/vc_column][/vc_row]

Filed under: Anti-Bribery Anti-Corruption Solution, Industry Insights, Resources by admin
No Comments »

Banking industry squad prevents £20m of fraud

Banking industry squad disrupted 23 Organized Criminal Groups (OCGs) preventing £20 million of fraud. The specialist police unit (DCPCU) is funded by the finance and banking industry in a dedicated effort to stop fraud.

Commonly known as the banking industry squad, the DCPCU (Dedicated Card and Payment Crime Unit) is a joint effort between the Metropolitan Police Service, the City of London Police as well as banking industry fraud investigators. Supported by UK Finance, DCPCU is on the frontline in the fight against fraud. And over the past year, the unit has worked in partnership with several social media platforms to take down over 1,600 accounts which featured posts relating to payment:

• 500 “money mules” accounts used to recruit young people
• 250 accounts involved in the trading stolen card details
• +400 “brokers” accounts 
• with the rest of the accounts used for “flipping”

In 2019 DCPCU seized £1.65 million of assets – over double the amount confiscated in the same period in 2018 – with a total of 75 fraudsters convicted to a total of 100 years in prison. DCPCU operational successes include:

• “Money mule” gang worth over £1.2 million and sentenced to nearly seven years in prison.
• Smising scam of worth £27 million disrupted and prevented with the combined prison sentence of over 14 years for two Londoner criminals who committed almost half a million pounds of fraud
• One individual from London found to have committed £50,000 of fraud and consequently sentenced to two years and nine months in prison
• A criminal committed over £31,000 of fraud in a Stolen card scheme

The DCPCU is very effective in disrupting criminals and a powerful example of how important is it that all sectors – i.e. banking industry – work with law enforcement to protect the public from fraud. 

Read more on what the Head of the DCPCU, Detective Chief Inspector Gary Robinson, UK Finance Managing Director of Economic Crime and National fraud coordinator, Commander Karen Baxter have to say. Read NOW!

About us…

Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS102000:2013 and BS7858:2019 Certifications is an HRO certified provider and partner with Oracle.

In 2016, CRI® Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI® Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organizations. Contact ABAC® for more on ISO Certification and training.

MEET THE CEO

Zafar I. Anjum is Group Chief Executive Officer of CRI® Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due to diligence and employee background screening services for some of the world’s leading business organisations. Headquartered in London (with a significant presence throughout the region) and licensed by the Dubai International Financial Centre-DIFC, the Qatar Financial Center – QFC, and the Abu Dhabi Global Market-ADGM, CRI® Group safeguard businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI® Group maintains offices in UAE, Pakistan, Qatar, Singapore, Malaysia, Brazil, China, the USA, and the United Kingdom.

Contact CRI® Group to learn more about its 3PRM-Certified™ third-party risk management strategy program and discover an effective and proactive approach to mitigating the risks associated with corruption, bribery, financial crimes and other dangerous risks posed by third-party partnerships.

CONTACT INFORMATION

Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI® Group Chief Executive Officer

37th Floor, 1 Canada Square, Canary Wharf, London, E14 5AA United Kingdom

t: +44 207 8681415 | m: +44 7588 454959 | e: zanjum@crigroup.com

Filed under: Finance & Professional services Industry, Industry Insights, Resources, United Kingdom, London by admin
No Comments »

TPRM: When is it time to conduct third-party screening?

When to conduct third-party screening?

Why do organisations screen their employees but not the companies they work with? Failing to screen third-party screening to the same level as permanent staff will increase your risks on many levels – from brand reputation to loss of money.

The nature of business today is largely shaped by our connected world. Many organisations conduct business across international borders and/or overseas and as part of various strategic and beneficial partnerships. In fact, the technology revolution and other factors that have removed barriers from business make it more essential than ever to have suppliers, vendors and other supporting companies helping to establish supply chains in various locations. And while they can be a great benefit to an organisation, these partnerships also represent an inherent security risk.

Third-party screening in compliance perspective

Vendors, suppliers and other third-party partners are entities largely outside of your control. While your organisation might have a high level of internal controls and stringent standards for ethical conduct, the entities that you partner with might not share those controls or values. Therefore, if something goes wrong, their failings can affect your organisation in terms of financial loss, liability, and damage to reputation.

Europe’s horse-meat scandal in 2013 or Quest Diagnostics data breach in 2019 is strong examples. Major organisations like Tesco were caught up in financial and PR disaster when they found that some of their suppliers were using horse meat in products sold as 100 per cent beef. Consumers were outraged, and many of the larger companies caught up in the scandal admitted that they had not performed proper due diligence or closely monitored their suppliers and their standards. And in the case of Diagnostics, the exposed records of 11.9 million patients.

When is the right time to conduct due diligence?

While third-party risk management should be an ongoing process, there are certain times when it is absolutely crucial for any organisation. At CRI® Group, we counsel our clients always to use third-party screening when doing any of the following:

• Performing pre-merger and acquisition research
• Conducting pre-IPO due diligence
• Engaging new clients
• Employing, contracting or retaining foreign business partners
• Implementing a consistent and audit-worthy AML and anti-corruption compliance program

Dodging trouble

Conducting 3PRM due diligence investigations at the right time has helped our clients avoid some major pitfalls, including the following:

• Merging with an international business embroiled in several behind-the-scenes legal battles
• Getting caught up in making procurement decisions involving the inappropriate influence of government officials who were slated to receive kickbacks
• Partnering with organisations that were potential credit risks, have claimed bankruptcy, have dissolved stated companies or were faced with debtor filings.
• Awarding work to an overseas contractor with absolutely no prior experience
• Affiliating with a contracting company owned by a politician with significant influence on future awards

With a network of trained professionals positioned across five continents, CRI® Group’s third-party risk management (3PRM™) services will provide your business with a comprehensive approach toward managing all third-party management risks. Contact us today and learn more about how we can help you address all of your third-party screening and due diligence needs – get a FREE QUOTE now!

VIEW OUR RISK MANAGEMENT SOLUTIONS BROCHURE

GET FREE QUOTE

About CRI® Group

Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider.

We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications is an HRO certified provider and partner with Oracle.

In 2016, CRI® Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification.

ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI® Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

CONTACT US

Filed under: All Industries, All Regions, Due Diligence, Industry Insights, Resources, Third-Party Risk Management by admin
No Comments »

Effective leadership during COVID-19: a guide for leaders

Strong and effective leadership during a crisis is key

COVID-19 and its rapid global spread have quickly eclipsed in size and scope. In addition to the human toll and the economic damage, coronavirus has significantly changed the business landscape beyond recognition. In the face of COVID-19 specific challenges and still-uncertain risks, business leaders are rightly concerned about how their organisation will continue to be affected. And what can they do next? However, there are several lessons from history, a pooled of fundamental qualities of effective leadership and leading practical practices that chief executives should consider.

COVID-19 impact on companies varies by geography and sector companies in different ways. Their reaction capabilities have put businesses at different phases of dealing with the outbreak and, therefore, the impacts. However, regardless of the extent of COVID-19 effect on an organisation, we believe that five fundamental qualities of effective leadership distinguish successful CEOs from the rest:

Five fundamental qualities of effective leadership

 As a leader trying to guide your organisation through the COVID-19 crisis, it is essential to take specific steps that can help soften up the crisis’s impact—and enable your organisation to emerge stronger.

1. Build Positive/Trusting Relationships with a rationale
2. Clarify the direction and stick to it
3. Aim for decisive actions with courage
4. The Power of a Clear Leadership Narrative
5. Champion long-view Change

Take specific tactical steps to elevate your business

Any business during a crisis such as COVID-19 goes through three phases: mitigation, or lessening the force or intensity of the crisis and how the company deals with the present situation and manages continuity; preparedness, during which a company learns with a concrete research-based set of actions that are taken as preventive measures for a post-COVID-19 and emerges stronger; and future-proofing, where the company prepares for and shapes the “next to normal.” CEOs have substantial and added responsibility to nimbly consider all three-time frames concurrently and allocate resources accordingly.

Within these broad imperatives, effective leaders can take specific tactical steps to elevate these qualities during the current crisis, blunting its impact and helping their organisations emerge stronger. This crisis can become an opportunity to move forward and create even more value and positive societal impact, rather than just bounce back to the status quo with the right approach.

The secret of effective leadership: Foresee the unforeseen

The outbreak of COVID-19 was an unpredictable crisis with extreme consequences, and its westward March across the planet have introduced a new kind of unforeseen risk:

• Since World War II, all the recessions have been caused by either economic policy mistakes, oil shocks, or financial bubbles – and the CIVID-19 is a new category on its own: a global societal collapse.
• The mass quarantining across the globe cut off consumption, stopped travel, hospitality, restaurant, and retail sectors. In China, for example, the mass shutdowns of factories evaporated the supply of products such as apparel, auto parts and electronic components and apparel.

Dial up your empathetic self

Emotional intelligence is critical in a crisis – a good and effective leader recognises the impact uncertainty has on the people who drive the business. Resilient leaders express empathy for the upheaval’s human side, acknowledging their employees’ priorities shift towards their family health and safety. A resilient leader prioritises workers and protects their economic well-being. Effective leaders also encourage their people to adopt a calm and systematic approach to whatever happens next –

At the onset of the COVID-19 outbreak, Deloitte conducted a human capital policies and practices survey in China. And the survey revealed the following steps companies and not-for-profit organisations were considering in response:

• More than half of government and public service entities focused on addressing employees’ psychological stress.
• 90% said it was an urgent requirement to provide their employees with remote and flexible work options.
• Companies in industries facing the most significant constraints on providing flexible and remote working options—such as energy, resources, and industrials—focused on providing physical protection (i.e. cleaner and safer work environments and PPE.

Cater to your audience

Because of COVID-19, customer experience takes on a new meaning – as customer’s needs dramatically shift from what you perceived before. Your customers are reverting down Maslow’s Hierarchy of Needs to essential concerns due to COVID-19. A recent McKinsey survey of U.S. consumers found that 64% of respondents have felt depressed, anxious, or both, and 39% stated that they would be unable to pay their bills after one month of unemployment.

Are you adapting your communications and customer experience to fulfil their new needs? Show empathy towards your customers, too —they are struggling through the crisis, and simple things can differentiate you from other businesses. Leading organisations are reorienting their customer experience such as:

• UberEats asks customers if they want food left at the door rather than passed by hand.
• Airlines are waiving cancellation fees and have emailed customers to describe their enhanced plane decontamination efforts.
• Energy companies are not shutting off power for nonpayment, and in some cases, they are even reconnecting customers whose service had been turned off before the crisis.
• Restaurants have encouraged their staff to visibly use hand sanitisers.
• Burger King provides two free kids meals to Americans who make any purchase through the Burger King app.

Yet, for the sake of those same employees and customers—as well as creditors and investors— leaders must stay vigilantly focused on protecting financial performance during and through the crisis – and making hard, fact-based decisions. The adage “cash is king” is most real amidst an existential event.

The following critical steps can help you protect your business performance:

1. Centralise decision-making: uncertainty paralyses decision-makers. Allocate or create a crisis team that is capable of consistency, speed, and especially decisiveness when making decisions
2. Articulating different economic scenarios (and fast) across all markets, generally scaling scenarios from mild to moderate to severe.
3. Project the financial impact of the scenarios on profitability and especially liquidity. This includes assessing the probability of violating debt covenants and terms and determining when available cash sources should be drawn.
4. Defining the non-negotiables: Which products, services, customer segments, business lines, employee segments, and so on are the most critical to ongoing and future cash flow and should be preserved, although even those non-negotiables may be impacted if scenarios tend to the more severe.
5. Identifying the levers leadership has available (within the boundaries of the non-negotiables) to impact financial performance, such as discretionary expense reduction, hiring freezes, or temporary plant closures.
6. Determining what actions to take and agreeing on the hierarchy of levers to be pulled as the severity of scenarios unfolds.

Developing a downturn planning playbook is important to have a head start in crises. A crisis playbook should include all scenarios, projections and non-negotiables so that it is easier to be adjusted for present circumstances. However, it is important to remind that a resilient leader knows a company’s purpose should remain unchangeable. Articulate a purpose beyond profit; in a recent survey by Forbes, 79% of business leaders believe that an organisation’s purpose is central to business success, yet 68% said they do not use it in leadership decision-making processes in their organisation.

COVID-19 has left under increased pressure, and stakeholders are paying close attention to every move. Therefore it is important to make decisions that tie back to the organisation’s purpose. Purpose-driven organisations tend to do better during challenging environments because:

1.  Purpose cultivates engaged employees: Employees perform better when they feel that their work has meaning. Research shows that employees who feel that their work has meaning and has a greater sense of connection perform better during volatile times and are there to help companies recover and grow when stability returns. Companies need to centre their business on an authentic purpose.
2.  Purpose attracts loyal customers and helps grow sales: Being a purpose-driven brand is 100% beneficial for your bottom line, no doubt about it. 8 in 10 consumers say they are more loyal to purpose-driven brands – a purpose-driven brand helps sustain customer relationships even during a crisis. When a business puts the purpose first, profits generally follow; however, the results can be more elusive when profits are first.
3.  Purpose helps companies transform: When companies face hard decisions, they tend to have a sharper sense of how they should evolve when guided by their purpose. Purpose makes for a cohesive transformation.
4. Purpose always put the mission first Organisations in the middle of a crisis face a flurry of urgent issues across innumerable fronts. Resilient leaders zero in on the most pressing of these, establishing priority areas that can quickly cascade.

Six top emergency management leading practices:

1.  Centralise command– launch and sustain a crisis command centre: Leading companies established emergency response teams to assess the risks and formulate response strategies after conducting robust scenario planning, which significantly improved the epidemic response mechanism and toolkits.
2. Support talent and strategy – retain & support talent, and they will enhance strategy: After the COVID-19 outbreak, many companies began implementing flexible work and working from home arrangements. Resilient leaders saw this as an opportunity for improvement, and many companies have identified and addressed new ways of work and communication within the organisation. Furthermore, leaders quickly understood the side effect of WFH and implemented a digital employee health declaration system to track their well-being.
3. Maintain and plan your financing and ensure business continuity: Update and develop business continuity plans to understand contractual obligations, evaluate financial impacts and liquidity requirements, formulate debt restructuring plans, and optimise assets to help restore economic viability. Another core focus was understanding the economic effects across the entire value chain.
4.  Support and trust your Supply chain: invest in digital trading solutions to combat supply chain interruptions, overcome logistics and labour shortages, and get better visibility into local access limitations to ensure product supply for the domestic market. Operational agility and data quality were critical in supply chain scenario planning.
5. Stay engaged with your customers:  maintain an open and ongoing line of communication with your customers, including informing them of any emergency actions taken. This approach of working in partnership has built confidence amid the uncertainty.
6.  Invest in Digital capabilities and develop digital roads – Strengthen digital capabilities: Revisiting your current marketing and e-commerce landscape for the short, medium, and long term is crucial for your business to succeed during a crisis. The current situation has made companies realise that to increase resilience, they need to implement digital capabilities across the entire organisation, promoting “no-touch” experiences and stepping away from brick-and-mortar presence.

Apple’s bold decision-making of closing 11 retail stores in COVID-19 affected areas in the U.S. demonstrates the courage inherent in Aim for speed over elegance. Apple also demonstrated several other principles:

• Empathising with the needs and concerns of its employees, including continuing to pay hourly workers as though operations followed a regular schedule and amending its leave policy for COVID-related health issues
• Reducing further shocks to an already depleted supply chain
• Staying connected to—and overtly demonstrating concern for—its customers and local communities
• Leveraging its at-scale digital presence by keeping its online store open and running
• Continuing to engage its business ecosystem via new channels, shifting the annual Worldwide Developers Conference in June to a digital-only gathering
• #7 – Engage with your business ecosystem

Speed is key

Covid-19 has tested companies and their reaction time. The reality is that most companies do not have the infrastructure to deliver accurate information or data in real-time, which has tested their operations. And COVID-19 will continue to test companies- are you ready to accept that you’ll need to act with imperfect information? Collect as much proxy data as you can to inform your decisions, so you’re not flying blind. When the crisis is over, you will have the opportunity to conduct a thorough review to see how to improve information quality in future crises—but during this one, you will likely have to set aside that kind of analysis.

Perfect is the enemy of the good, especially during crises when prompt action is required. An effective leader understands that teams and individuals deeply embedded in a specific context are likely to be in the best position to develop creative approaches during a crisis. COVID-19 is forcing leaders into situations that were never anticipated – however, this is a great opportunity to encourage more initiative and decision rights at all levels of the organisation.

Tip: Make the objective clear, but allow more flexible local autonomy.

Case study: one coffee shop chain gave each store leadership the flexibility to reconfigure tables to maintain social distancing. This approach may have value beyond the current crisis as organisations learn to conduct business in more and more uncertain times.

Medium is the message.

Marshall McLuhan’s famous statement “the medium is the message” in the midst of a crisis is even more relevant during the COVID-19 crisis.

Many psychologists assert that most communication today lacks eye contact, voice intonation, and body language essential to building a trust-based relationship.

Tip: Body language is essential in building a trust-based relationship with your team. Instead of emails, encourage video to connect emotionally with your teams – and avoid the overwhelming feeling a busy inbox leaves.

Communication is key; as a leader, your team and stakeholders depend on your regular guidance. There is a fine balance between communicating in advance of all the facts and being late to comment. We have seen leading companies adopt a policy of shorter, more frequent communications based on what they do know and filling in details later. Incomplete or conflicting communication will slow your business’ response; your teams and stakeholders may start filling the void with misinformation and assumptions.

In a time of crisis, trust is paramount. This simple formula emphasises the key elements of trust for individuals and organisations:

Trust = Transparency + Relationship + Experience

Trust starts with transparency: telling what you know and admitting what you don’t. Trust is also a function of relationships: some level of “knowing” each other and your employees, customers, and ecosystem. And lastly, it also depends on experience: Do you reliably do what you say? In times of growing uncertainty, trust is increasingly built by demonstrating an ability to address unanticipated situations and a steady commitment to address the needs of all stakeholders in the best way possible.

This is not just about charts and numbers. It’s also important to recognise and address the emotions of all stakeholders. Narratives can be powerful ways to acknowledge the fears that naturally surface in times of crisis while at the same time framing the opportunity that can be achieved if stakeholders come together and commit to overcoming the challenges that stand in the way.

This is not just about charts and numbers. Narratives can be powerful ways to acknowledge the fears that naturally surface in times of crisis while at the same time framing the opportunity that can be achieved if stakeholders come together and commit to overcoming the challenges that stand in the way.

It’s a marathon, not a sprint

Any period of volatility can create opportunities that businesses can leverage if they are prepared. In the case of the COVID-19 outbreak, organisations that take a more assertive and longer-term approach can spark innovations that will define the next “normal.”

Harvard Business Review has assessed the corporate performance of over 4.7000 companies during the past three recessions and found that those that cut costs fastest and deepest had the lowest probability of outperforming competitors after the economy recovered. In other words, to emerge from a recession, your businesses need to strike the right balance between short- and long-term strategies by investing comprehensively in the future while selectively reducing costs to survive the recession. During the COVID-19 ……. particularly susceptible to a short-term mindset.

Plan structural changes and any lasting effects

COVID-19 is likely to accelerate fundamental and structural changes that were inevitable in any case—but are now expected to occur far faster than they would otherwise. Consider that the “digitalisation” of work—undertaken from home or elsewhere, with remote collaboration and reduced travel for physical colocation—has been evolving steadily. Today, all around the world, businesses—and their talent—are learning to communicate, collaborate, and coordinate on virtual platforms and understand the increased efficacy and efficiency such work modalities can provide. Virtual work and collaboration tools will likely create a booming new market space.

The necessity of operating differently allows businesses to understand what they can do. These structural changes will require you to alter your business strategy and planning. So ask yourself:

• How can I shift my staffing model to allow more telecommuting or remote work? And how will that shift affect our real estate portfolio?
• Can we achieve cost savings by shrinking our organisation’s physical footprint?
• What upgrades are required for video conferencing and network availability?
• Will I need more robust cybersecurity protocols?
• If I adopt a decentralised work model, what new liabilities or challenges will I have to face?
• What changes do I need to make to management, employee training and communication policies to run a more distributed workforce?

COVID-19 is forcing businesses to operate differently from what they know best. However, this can allow businesses to understand what they can do.

Tip: Test your team while they are WFH. Testing can determine if your company can meet any future requirements if the current conditions persist – then, with the appropriate data, you can consider whether you should continue doing so.

Only Market Shapers can thrive.

Shaping your current strategies can create a source of new value that can ultimately help you emerge from unanticipated crises. Those who shape their industry’s future rather than adapt to it will emerge stronger than the rest. Organisations emerging from this crisis and shifting into the “future-proofing“ stage will need to reinvent themselves, from identifying and solving new opportunities to aligning themselves with the future-shapers of their industry or even becoming the nexus of the next ecosystem. At the same time, their competitors focus on the crisis.

COVID-19 impacts have created considerable investments in new manufacturing technologies that allow businesses to shorten the time between production to consumption—creating entirely new markets to be shaped.

Predict new business models and implement them

Newly shaped markets prompt new business models – COVID-19 has tested business infrastructures, and some have crumbled. How will emerging trends, structural changes, and new markets redefine how your company and industry will be organised tomorrow?

For example, many have long realised that education was ripe for significant changes enabled by digital technologies. According to the United Nations, with over 290 million students out of school globally due to COVID-19, the demand for online offerings, curricula, and platforms will likely accelerate. Yet, some universities and faculty are just beginning to improvise remote offerings. Designing around the massive COVID-19 constraint demonstrates the real promise of potentially revolutionary changes in how we structure, locate, and operate our approaches to learning—which are likely to lead to dynamic new market-making opportunities in this area.

How will emerging trends, structural changes, and new markets redefine how your company and industry will be organised tomorrow?

As another example, consider the growth in the adoption of A.I. and robotics. 

Already playing a pivotal role in detecting and treating COVID-19, AI-equipped tools scan social media to analyse virus progression in real-time, recognising viral pneumonia in chest CT scans 45 times faster than humans with 96% accuracy, and conducting molecular synthesis and validation in days rather than months or years.

There is a real sense of urgency to stop COVID-19 from further damage. With private and public sectors partnering and investing in answers, the future health care models will change as over half is slashing the typical decade-long pharmaceutical R&D cycle, and the regulatory framework is skipped.

COVID-19 will continue to test resilient and effective leadership

COVID-19 will redefine any resilient leadership. Leaders will need to lead their organisations between having to make decisions without perfect information, often with only a few hours or days to spare. More than ever, the myriad of decisions and challenges will significantly implicate the organisation’s whole system, from employees to customers, from clients to financial partners, from suppliers to investors, and other stakeholders—as well as society.

Clarity of thinking, communications, and decision-making will be at a premium. Those CEOs who can make the best exhibit this clarity—and lead from the heart and the head—will inspire their organisations to persevere through this crisis, positioning their brand to emerge in a better place, prepared for whatever may come. Crises like these, with deep challenges to be navigated, will also lead to opportunities for learning and deepening trust with all stakeholders while equipping organisations for a step change that creates more value not just for shareholders but also for society.

Action guide for effective leadership

Launch and sustain a crisis command centre

Most organisations in the affected regions have launched some form of the crisis response unit, either as a result of a preestablished crisis response plan or on an ad hoc basis, to gain an enterprisewide understanding of the impact and coordinate their efforts across functions. Subteams have been created to manage specific workstreams such as communications, legal, finance, and operations. They operate with a clear mandate provided by executive management and have been empowered to make swift decisions in the following areas.

Such a command centre doesn’t have to be entirely defensive: It can also help break traditional orthodoxies. Airlines that are cancelling flights, for example, are making the downtime more productive by prioritising scheduled maintenance for grounded aircraft—and reallocating larger planes to space-constrained routes—enabling them to make more efficient use of resources.

Such a command centre doesn’t have to be entirely defensive: It can also help break traditional orthodoxies.

Support talent and enhance strategy: work, workforce, and  workplace

It is key to support your talent while they support your strategy. To do so:

1. Evaluate the actual work of your company and how it might be changed. Work has to be onsite and evaluate what safeguards can be implemented, such as revised cleaning protocols or personal protective equipment. Resilient leaders rapidly assess what work is mission-critical and what can be deferred or deprioritised and then help teams understand where their focus needs to be (including what work is not strategically critical). Allow your people to focus on the most vital tasks and empower teams to be creative in delivering nonessential work in ways that minimise unnecessary risk or exposure to your employees and your customers.
2. Focus on the workforce: because the most effective plans encompass employees (as well as contractors, vendors, partners, and unions) who need to be included to keep the entire workforce safe. Address the immediate COVID-19-related human needs for information, including education on COVID-19 symptoms and prevention and access to employee assistance resources. As the work itself contracts and/or expands, ensure that you have operational plans for site disruption and reactivation, including communicating to affected employees. While assessing possible changes to leave policies (such as for employees caring for affected family members), also prepare for potentially higher absenteeism, lower productivity, and even work refusal until the situation ultimately normalises post-crisis.
3. Understand that the workplace and its culture are critical: because of COVID-19, companies need to ensure the safety of working environments and prepare workplaces for containment and contamination. Suppose an employee is suspected of being infected with COVID-19. In that case, a clear process must be in place for adhering to local health care requirements for isolating and/or treating the employee at the facility.

As COVID-19 continues to change any workplace culture, as an effective leader, how you deploy your workforce, distribute work and engage your people will change. Explore this new narrative to think about how you can elevate communications and create a more effective and healthy workforce.

Plan business continuity and financing

In almost every financial crisis, preserving cash and liquidity is a top priority. Even the most financially stable can struggle when challenges impact all industries simultaneously. In the 2008–2009 recession, Companies with strong balance sheets were among the many that still experienced liquidity constraints when commercial paper markets were suddenly interrupted. In some cases, this compromised their ability to meet basic short-term obligations.

The COVID-19 crisis will be no exception – there is a long period a large number of companies now face weeks, if not months, of disrupted markets. For many industries—such as travel and hospitality—the revenue lost during this period may be permanent rather than made up later. That’s putting sudden, unanticipated pressure on working capital lines and liquidity.

Some companies may maintain adequate flexibility by making drawdowns on their revolving credit facilities. Others find that they need to approach their banks to arrange temporarily larger facilities and/or covenant resets/waivers. However, such efforts could prove unsuccessful since banks may have reached their risk tolerance limits for a single credit. Revolving credit facilities may be frozen due to covenant limits and/or cross-defaults. Security packages hastily assembled to support new funding may be insufficient due to limited collateral availability or prolonged economic distress. Or companies may be looking for a highly customised, rolling short-term facility on terms that do not naturally fit into a bank’s standard product suite.

Beyond immediate cash needs, the finance function also must respond to potential accounting and financial reporting implications—if they can even get their books closed and/or audits completed in affected areas. For instance, some corporations implementing first-ever (and quite appropriate) remote work arrangements may face unexpected tax challenges when paying employees in a different local tax jurisdiction than their main office.

Supply chain due to diligence

As the “world’s factory,” any significant disruption in China puts global supply chains at risk. The COVID-19 crisis, originating from the highly industrialised province of Wuhan, highlights the potential perils of this dependency: More than 90 per cent of Fortune 1000 companies had Tier 1 and/or Tier 2 suppliers in most-affected China provinces.

A decades-long focus on supply chain optimisation to minimise costs, reduce inventories, and drive up asset utilisation has improved many companies’ supply chain efficiency. But COVID-19 illustrates that many companies are not fully aware of the vulnerability of their supply chain relationships to global shocks when optimising for efficiency over resilience. Further, COVID-19 demonstrates that a global outbreak can have many longer-lasting impacts than a local epidemic on a supply chain, which endures foreshocks and aftershocks as hot spots evolve worldwide.

Without a comprehensive plan or playbook—and most organisations lack one for addressing a global outbreak—companies can over adjust, causing greater disruption and unnecessary expenses. For example, some companies have responded to the COVID-19 crisis by imposing across-the-board inventory increases out of fear of running short of necessary supplies. For example, a bulge in retail apparel inventory concurrent with a rapid drop in consumer spending can exacerbate cash needs. Such decisions need to thoughtfully consider the unintended consequences and shocks.

See the sidebar “Strengthening the supply chain” for important actions to consider to strengthen your global supply chain.

Strengthening your supply chain

Supply-side: For companies that produce, distribute, or source from suppliers in affected areas, steps may include:

• Enhance focus on workforce/labour planning
• Focus on Tier 1 supplier risk
• Illuminate the extended supply network
• Understand and activate alternate sources of supply
• Update inventory policy and planning parameters
• Enhance inbound materials visibility
• Prepare for plant closures
• Focus on production scheduling agility
• Evaluate alternative outbound logistics options and secure capacity
• Conduct global scenario planning

Demand-side: For companies that sell products or commodities to affected areas, steps may include:

• Understand the demand impact specific to your business
• Confirm short-term demand-supply synchronisation strategy
• Prepare for potential channel shifts
• Evaluate alternative inbound logistics options
• Enhance the ability to allocate to customers based on priority
• Open channels of communication with key customers
• Prepare for the rebound
• Conduct global scenario planning

Inside: For companies that operate or have business relationships in affected areas, steps may include:

• Educate employees on COVID-19 symptoms and prevention
• Reinforce screening protocols
• Prepare for increased absenteeism
• .Restrict nonessential travel and promote flexible working arrangements
• Align I.T. systems and support to evolving work requirements
• Prepare succession plans for key executive positions
• Focus on cash flow

Stay engaged with your customers.

You must maintain a relationship with your audience, and it is time for your company’s brand to lead. During crises, customer needs shift dramatically – from the rational to the emotional – it is your job as a leader to intercept that shift.

A study of consumer behaviour found that a business’s traditional customer segments are at risk during a downturn. Their purchasing behaviour is driven more by their emotional response to the economic volatility than by the characteristics businesses typically consider when defining their customer segments.

Particularly important is to consider how your own sales efforts will appear. Suppose you’re going to offer price cuts or marketing promotions. In that case, some might see that as an attempt to capitalise on a crisis—or worse, undermine public health efforts to encourage people to stay out of stores and other public places. Look at other benefits you can offer customers that help sustain the customer relationship. For example, some hospitality companies are deferring the expiration of loyalty points.

Digital Transformation inside and outside

With the COVID-19 lockdowns happening more often than not and the recommended “social distancing” becoming permanent, organisations had to change. Resilient companies expanded their operations into the virtual and digital sphere.

Decisions like asking their workforce to WFH pushed companies into a digital transformation. 70% of companies had a digital transformation or were working on one. However, COVID-19 tested organisations and their digital capabilities. As a resilient leader, if you are prepared to make remote work a reality, you must ensure that the organisation can support it. Also, consider the impact of WFH on your team, who are likely to feel socially isolated. Dispersing your workforce remotely comes with the potential loss of innovation as the isolation will limit in-person interaction.

The increase in online activity will have big implications on your system stability, network robustness, and data security, especially if you do business in parts of the world where telecom and systems infrastructure is lacking. The key here is to ensure your team has a system in place, ensuring smooth operation as the workplace and workforce evolve. There is also the cyber risk your organisation faces with such arrangements. Since the lockdowns, phishing scams and other cyber attacks have been rising; the fraud rate has risen by 33%. Implementing the proper cybersecurity protocols will safeguard your networks, data and team. Our article on how the COVID-19 increased identity theft cases: 7 steps to lessen your risk can help you understand all of the steps you can take to protect your business.

Maintaining customer connections virtually amid shifting behaviours also has challenges. As COVID-19 fears rose in the United States in early March, online sales increased 75% year over year, and the number of online shoppers increased too. While retailers may want to move more sales online to offset declining store traffic, they should ensure that their team has tested a scaled capability before making such a shift. Providing substandard service could damage your brand long-term than the lost sales in the short term.

Embrace your business ecosystem and future-proof your company

With new business models emerging from the crisis COVID-19 is creating, you have an opportunity to become the nexus of a brand new future-proof ecosystem. This new global and digital ecosystem will add layers of complexity and potential vulnerabilities to your business—but it can also offer opportunities that can future-proof your company. As an effective leader, consider the following questions:

• How can we use the ecosystem to improve the resilience of our organisation during COVID-19?
• How am I extending my stakeholder communication to embrace ecosystem partners that have become critical business model components?
• What additional data might my partners have to improve my operations?
• What level of communication is appropriate for the investor community—the more traditional “ecosystem”.
• As new business models emerge from the crisis, can I become the nexus of a new, emerging ecosystem built for the new “normal”?

Filed under: Industry Insights, Resources by admin
No Comments »

Middle East Background Screening: Compliance With Privacy Laws

It’s a fact that some of the most talented and promising job candidates possess the most disturbing pasts. Such deception can lead to a perilous future for an employer. This is the primary reason businesses are strongly advised to conduct background screening investigations before hiring seemingly well-qualified managerial candidates. background screening Privacy Laws Compliance

In every region and jurisdiction in the world, there are different regulations that govern what background screeners can and can’t do in regards to providing pre- and post-employment screening services. The laws in the United States, for example, are not the same as those that affect investigations in the Middle East. The concern over individual privacy and data protection are hot discussion items globally. Companies that engage background screening firms for the Middle East need to make sure those investigators are following all rules and regulations in regards to privacy – or else they might face liability along with the screening provider.

Examples of Privacy Laws in the Middle East

While reputable screening firms in the U.S. comply closely with the Fair Credit Reporting Act to conduct domestic background investigations, foreign investigations are much more complex.

Middle East countries have no prohibitive legislation that governs the employment screening process. At the same time, there is no cooperative legislation and regulation to support background screening services for employee due diligence. However, background screening industry professionals must adhere to strict data protection requirements (such as the GDPR, local Data Protection regimes specifically DIFC Data Protection, ADGM Data Protection and QFC Data Protection regulations) to process consensually based personal information.

In UAE, local police departments provide “Good Conduct Certificates” for employees for immigration purposes, while Dubai International Financial Centre (DIFC) Data Protection standards allow for the processing of sensitive personal information, such as criminal history, with signed consent from the data subject for employee due diligence requirements.

In the United Arab Emirates, data protection laws permit investigators to process sensitive personal information such as criminal history data. As a DIFC-licensed entity, the Corporate Research and Investigations Limited “CRI Group” (as well as other reputable background screening firms) must maintain strict adherence to the region’s Data Protection Law in order to fulfil our ongoing DIFC licensed status. As in the United States, the procurement of personal data in this region – and any subsequent transfer of data outside of the DIFC – may only be attained with the written consent of the individual being investigated.

Reputable screening firms in the Middle East will also comply with regional privacy laws (such as the GDPR) by appointing an internal Data Protection Officer (DPO) whose primary responsibility is to conduct independent audits of the firm’s various information processing operations which handle customer and employee data.  The DPO ensures that personal data is handled in accordance with all relevant data protection provisions covering online and offline data procurement while complying with local and regional regulations pertaining to individual privacy standards.

The Urgent Need for Background Checks

While all guidelines and regulations must be followed, the absolute need for comprehensive background screening in the Middle East cannot be disputed. The region has a labor force of over 150 million individuals serving in all capacities and industries (World Bank, 2019). Those statistics can be quickly put into context when considering that deception in the employment process, such as résumé fraud, is believed to be rampant and widespread: One report estimates that 80 percent of all job applicants intentionally mislead potential employers on their résumé or application (Security, 2017).

Case Study

To help understand the problem, consider this case study: An international company was hiring to fill a position in the Middle East. When they engaged a firm that specialises in pre- and post-employment background screening, the firm’s investigators uncovered disturbing details about an applicant. One of the individual’s previous employers reported that the applicant was hired without any prior experience, was trained for a couple of months, and then terminated due to committing cash embezzlement as well as participating in harassment and workplace violence. A second employment verification revealed his termination, as he caused a financial loss to the company.

In the above example, the background checking company uncovered the deception through comprehensive background screening that went beyond basic database checks and reviews of public records. In the Middle East, background investigations – both for pre- and post-employment screening – often require a “boots on the ground” approach. This can mean conducting much of an investigation literally on foot, travelling to remote regions to interview sources and check documents in person. And, the entire investigation was conducted within all privacy laws and regulations.

Some job candidates will seek an advantage through fraudulent means. The hidden truth might even include criminal behavior. It is important for any organisation to verify information provided by individuals they seek to hire. In the Middle East, this process will often look different than it would in the U.S. By following all local laws and regulations, however, a reputable background check firm will be helping to protect your company – while also safeguarding your future.

Let’s Talk!

If you have any further questions or interest in implementing compliance solutions, please contact us.

About the Author

Zafar Anjum | Group Chief Executive, CRI Group

Anjum is founder and CEO of CRI Group and ABAC Center of Excellence. Having dedicated three decades to the areas of fraud prevention, protective integrity, security, compliance, anti-bribery and anti-corruption, Zafar Anjum is a highly respected professional in his field.

Filed under: Background Investigation, Employee Background Check, Industry Insights, Middle East, Resources by admin
No Comments »