Think Employee Background Checks are a waste of time? Think again!

So you think an Employee Background Check is a waste of your time? Here are some alarming stories for you:

Why an Employee Background Vetting is an Indispensable Recruitment Tool

The escalating figure of crime scenes and fraudulence incidents justifies why organisations take up this step. Within the dynamic business environment we’re operating in, corporations are now more inclined towards being vigilant of the quality of employees they are hiring. Specifically, the human resource managers are strategizing to reduce employee turnover and burnout rate thereby increasing retention of competent employees. With the vision of achieving a sustainable workplace environment, pre-employment screening and comprehensive background checks are becoming an essential instrument to welcome and retain the finest possible.  

The concept of Employee Background Check

An Employee Background Check is a worthwhile concept as employers strive to have the best pick from the candidates who show up for the recruitment process. After the interview sessions are over, a minimum of two weeks is required to get through the employee background screening procedure before you can finalise the hires. Since this procedure requires a thorough knowledge of regulatory compliance and investigative analytical skills, corporations outsource this service to the industrial experts to conduct a comprehensive verification of employee’s academic, professional and even social presence. After the employer is gratified with the check, the employee is offered an appointment letter to join them.

CRI Group’s EmploySmart™ can be tailored into specific screening packages to meet the requirements of each specific position within your organisation. 

Download our EmploySmart brochure or get a free quote to ensure a safe work environment for all.

Advantages of an Employee Background Check

Organisations carry out such checks due to a myriad of reasons. Some of these include:

• Validating the resume
• Learning about the nature of the candidate
• Behaviour at past offices
• Learning about criminal experience

What to include in Employee Background Checks?

• History of employment: Verify the references given by the candidate as it confirms their behavioural and working patterns with previous employers. 
• Criminal background: It is essential to confirm that the candidate does not have a criminal history.
• Credit history: Knowing the credit rating of your candidate is also important as this reveals the integrity of the employees. 
• Terror Watch List: For the businesses running in countries like the USA, checking the Terror Watch List against names of their candidates is especially critical.
• Checking Social Security: Organisations should check the legitimacy of Social Security Numbers of candidates. This will also confirm if the candidate has been using other names.
• Checking public/court records: This is done to check if the candidate has been implicated in any sort of court proceedings or not.
• Reference checks: There are two types of reference Employee Background Checks: personal and employment. Both facilitate in confirming the integrity, reliability, steadiness, and personality of the employee.
• Checking Sex Offender Registry: A Sex Offender Registry check must be conducted as well so you don’t endanger others, especially in roles surrounding children and other susceptible individuals, by hiring a sexual predator.
• Education check: This is carried out to determine the authenticity of the various credentials provided by the candidate you are planning to recruit.
• Driving Records: If your candidate is required to drive a company-owned vehicle, then checking driving records and license is essential for you.
• Record of Military Service: You need to pay attention to some key measures while hiring a candidate with a military service record. That is why checking the military service records of your candidates is also important.
• Compensation Record: Checking the candidate’s compensation claims from past employers is also significant before hiring an employee.

In conducting employee background checks, there are some golden rules that one needs to observe to avoid any legal complications. These do and don’ts include but are not limited to:

Do’s

• Having a consistent background checks policy and detailing how the policy should be used.
• Getting legal advice on how to conduct background checks under the local legal framework.
• Giving the applicants a chance to clear up any faults or misconstructions appearing on their documentations and during the interview process.
• Employing a Background Check service provider who is compliant with the legal frameworks of your region
• Understanding the difference between background checks vs investigative consumer reports.

Don’ts

• Avoid background checks on an applicant-by-applicant basis. The checks should be carried out for everyone.
• Avoid making the assumption that some parts of the background check process are routine
• Avoid making decisions without giving the applicant a chance to respond.
• Avoid assuming that any companies seeking information about an individual are legally compliant.
• Avoid requesting information about the character or personal and the private life of an individual while verifying the historical employment facts.

Necessities for conducting Employee Background Checks

• You need to have a candidate’s full name, date of birth, and Social Security Number for doing a background check.
• If you want to check credit reports, military records, and school transcripts, you need the candidate’s permission.
• If you hire an outside company to do the background check, you need to take the candidate’s permission.
• If the candidate denies the permission, you will be entitled to take the candidate out of consideration for that job profile.

What are the disadvantages of an Employee Background Check?

One of the major disadvantages is that you might see this as a wastage of time and money. An organisation invests large sums of money in conducting such investigations, and most of the time, the person turns out to be a genuine one and with the time it takes to conduct these checks, the candidate may think that the organisation is not interested and hence, they may join some other organisation in this period.

Judging a candidate on his/her background deeds may not always prove to be fruitful either. It may happen that a candidate got trapped in a criminal offence and in an actual sense, they are a gem of a person. But when you do not know the candidate personally, you will focus on the verification reports and let a genuine person go.

If there is still any uncertainty in your mind about conducting employee background checks, why not reach out to us? CRI Group has experts across the globe from all backgrounds who are trained to provide you with specialised, expert advice fit for your business needs. Get in touch today!

GET IN TOUCH

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, TPRM, 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.

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The Consequences of Neglecting Background Screening

Neglecting Background Screening

Are you neglecting background screening? What consequences may affect your organisation when you ignore this process when hiring? What is it about Background Screening? Statistics have revealed to us that a substantial quantity of resumes that are presented to HR during the recruitment process comprised fabricated material; shortlisting is a rigorous assortment procedure intended to put your applicant on trial, but if you are interviewing an individual who has fabricated much of their resume, how can you make a good judge of character? Put, executing a pre-employment check is the best way to combat this issue.

Background screening is vital to organisations of all types and industries as it can assist in authenticating your employees’ record of accomplishment and help avoid a bad hire. Before COVID-19, it was found that an estimate of 85% of organisations testified to conducting background screening of some type. On the same note, a vast 92 per cent stated that they trust their employees with confidential data but without the assistance of a background screening measure. Find out other ways COVID has impacted the hiring process, or download our background screening brochure.

Below, CRI Group™ has compiled a list of 5 risks you are running into when failing to conduct a background screening check before employment.

1. Your prospective member of staff could be a felon

Hiring a candidate with a criminal record could taint your company’s reputation, generate a highly volatile atmosphere in your office, and harm other staff members. An employer has the right to investigate an applicants’ criminal past; however, the only way to genuinely acquire the data surrounding an applicant’s criminal past when they intend on masking the evidence is through a criminal background check. 

A professional background verification service is a must to communicate with the local authorities to acquire legitimate illegal data and make a well-informed decision for the benefit of your organisation.

2. The odds of employing an unqualified candidate devoid of background screening is 1 out of 6

1 out of every 6 candidates carry inflated or falsified documents to persuade you into offering them the position – and this can be accredited to the rise of credential mills and fake corporations; applicants commonly use counterfeit degrees and false employment records to get hired, and it takes more than just a phone call to find out the reality. 

Background service providers use various procedures to obtain legitimate data, including private trips to the university/corporations where applicants allege to have graduated from or worked. Applicants with falsified resumes are not simply deficient in both integrity and honesty – in most cases, they are also not competent enough to fit your job description. A straightforward background verification uncovers this deception and prevents you from hiring an unqualified candidate.

3. Endangering the welfare of other members of the task force

In correspondence to the Substance Abuse and Mental Health Administration (SAMHSA),9 % of approximately 22.4 million unlawful drug users are employed either full time or part-time. A substance abuser, aside from grappling with efficiency, will also inhibit the performance of their co-worker with their improper demeanour. 

Employees with a record of drug abuse and misconduct are also deemed to be exceedingly inconsistent and present themselves as a danger to their co-workers; workplace violence and delinquency can be attributed to disregarding employee drug tests and criminal checks – checks that avert such calamities making your office peaceful and an improved place to work.

4. Increased abrasion can also be attributed to improper background screening

Pre-employment screening underlines the notion of quality over quantity. It makes sure that you hire the right candidate from a mass of applicants who applied for the position as employees with unsatisfactory credentials habitually find their way into your organisation through fabricated evidence. Hiring model candidates with an admirable mindset and relevant qualifications can mitigate employee turnover and enhance the general outcome of your organisation. However, the good news is that they never last for long, owing to their shortage of output and failure to handle the work delegated to them.

5. A candidate’s social media presence and global database can help nail down an accurate judge of character

Social media platforms in conjunction with international databases, for instance, criminal watch lists, credit archives, and public litigation archives, can expose your candidates’ positive and negative characteristics that may escape you during the interview and selection process. Abandoning these checks will hinder you as an employer from seeing your candidate’s best or worst side when picking among leading applicants who contend for a critical position. Employers who operate social media checks on their candidates have found it simpler to identify their candidates better, as social media is where the candidates are more apt to demonstrate their temperament and talents. The process for operating social media and archive checks can be burdensome, but rest assured that pre-employment screening providers are devoted to passing thorough checks on social media platforms and hundreds of databases to assist employers worldwide make critical hiring judgments.

The Verdict?

Background screening has achieved immense recognition throughout the world over the previous few years as it should do – its impact and the modern setting assist in diminishing the pressures that jeopardise every employer’s aim to enhance their personnel and work environment. Verification should be a compulsory component of an organisation’s onboarding procedure to alleviate all the risks we have discussed thus far. Notwithstanding the apparent advantages that background screening presents, it likewise confirms that your organisation hires the most excellent contenders who would promise continual triumph.

CRI™ is certified by British Standard Institute BSI for the scope of BS 7858:2019 screening of individuals working in a secure environment, Code of practice and BS 102000:2018 Code of practice for the provision of investigative services. The BSI is the only BS 7858 accredited background screening services provider in the UAE and the Middle East. Find out more about the BS 7858:2019 or download our BS7858:2019 free playbook.

The more you invest in sourcing morally correct corporate conduct, the more you can expect to be rewarded with a catalytic action to grow and expand your organisation.

Let’s Talk!

Don’t leave hiring to chance. Take a proactive stance with the highest level of background screening as a part of your essential corporate strategy. Contact us today to learn more about our full range of services to help your organisation stay protected.

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Employee Background Checks: A Requisite for all Businesses

Employee Background Check Concepts

Employee Background check concepts are inescapable for your organisation if you are looking to minimise risks surrounding a bad hire. The concept of an employee background check has become one of the most significant phases in the recruitment process.

The escalating figure of crime scenes and fraudulence incidents is a key justification why organisations take up this step as aside from the rising crime rates, organisations are also becoming hyperaware of their employee turnover rate, employee burnout, employee retention, etc. Employee Background Checks are a highly effective method of ensuring that organisations are recruiting the finest. What are the key concepts of conducting an employee background check and why is it substantial for corporations of all sizes and statures?

Concepts of Employee Background Check

In wake of the digital development, it is fair to say that the recruitment process has become quite demanding, and an employee needs to cross numerous phases to at the right time reach the finishing point. The Employee Background Check is quite a time-consuming concept as employers strive to have the greatest pick from the numerous candidates who have come up for the recruitment process. After the interview sessions are over, it needs some time to let the employee know about their joining since this is the time when most organisations go through the employee background check procedure. Some companies opt to perform this procedure in-house while some others hire external service providers to conduct a comprehensive check of the employee’s academic, professional, and even social presence. After the employer is gratified with the check, the employee is offered an appointment letter to join them.

CRI Group’s EmploySmart™ can be tailored into specific screening packages to meet the requirements of each specific position within your organisation. Ensure a safe work environment for all. Download our EmploySmart brochure or get a free quote.

Significance of The Employee Background Check and its Advantages

Organisations carry out such checks due to a myriad of reasons, some of these include:

1. Knowing the validity of the resume

Many candidates tend to embellish their experiences on their resumes and make use of such methods to obtain their desired job through such falsified recognitions. If a candidate does obtain their role through this method, they will not be able to handle the position well making this a complicated situation for the employee and the employer concurrently. Therefore, it is incredibly valuable to know what the candidate has falsified on their resume. An appropriate and comprehensive verification of the employee’s background can unveil all such truths in front of the employer. After knowing the true details, employers can make a judgment that will be more beneficial for the organisation as well as the employee.

2. Knowing about the nature of the candidate

Like the falsified details on the resume, candidates also tend to wear somewhat of the false mask of confidence on their faces while attending the interview. It is tricky to distinguish and judge a person in a conversation of a few minutes. If it is a career profile where the pressure is going to be intense, it is crucial to know whether the candidate can handle such pressure or not. Knowing the authentic behaviour and personality aids in evading bad hires. The experts of the verification check get you an appropriate note about the personality, nature, and behaviour of the candidate to determine whether they can match up to the demands of the needed position.

3. Knowing experiences at the past offices

Candidates produce diplomatic answers about their past experiences when a question is thrown at them about said experiences. Many of the experts suggest cracking this during the interview session as the employers must verify the factual scenario at the previous offices. It may turn out that the candidate had a terrible record at the last office, or it may also happen that the employer had fired the candidate from the last job. There can be a few things that can happen. You can of course offer the candidate a chance to clarify, but it is imperative to get the verification done before this.

4. Knowing criminal experience and legal support

Having an employee background check is also about having an awareness of any criminal experience a candidate could have potentially had. It can be unsafe for the organisation to hire an employee with such a background and place them amid unharmful employees. It is just as vital to know whether the candidate has legal support or not. If yes, it should be checked whether the candidate has misused the support in the past or not. If the candidate has misused the support in the form of a lawsuit or so in the past, they do the same for your organisation too.

What to include in Employee Background Check?

• History of employment: Verify the reference given by the candidate as it confirms their behavioural and working patterns with previous employers. This way, their overall performance, commitment, and proclivities can be assessed.
• Criminal background: It is essential to determine that the candidate does not have a criminal history. It is inevitable, principally for the profiles related to defence or trust.
• Credit history: Knowing the credit rating of your candidate is also important as this reveals the integrity of the employees. This can be done by completing an employee background check for the credit history.
• Terror Watch List: For the businesses running in countries like the USA, checking the Terror Watch List of their candidates is especially critical. Again, it is a necessity for security positions.
• Checking Social Security: Organisations should check the legitimacy of Social Security Number. Proper background checks of distinct names, aliases, date of birth, history of addresses, etc. This way, it can be found out if the candidate has been living with other names or anything else questionable which is not accessible in criminal records.
• Checking public/court records: This is done to check if the candidate has been or is implicated in any sort of court proceedings or not. This is incredibly significant in picking the right candidate that can offer comprehensive devotion to the job profile you are proposing to extend.
• Reference checks: There are two types of reference Employee Background Checks: personal and employment. Both facilitate in confirming the integrity, reliability, steadiness, and personality of the employee.
• Checking Sex Offender Registry: Sex Offender Registry check must be an integral part of the employee background check as you must not endanger other employees or consumers, especially in roles surrounding children and other susceptible individuals, by hiring a sexual predator.
• Education check: This sort of background check is carried out to determine the authenticity of the various credentials provided by the candidate you are planning to recruit.
• Driving Records: If your candidate is required to drive a company-owned vehicle, then checking driving records and license is essential for you.
• Record of Military Service: You need to pay attention to some key measures while hiring a candidate with a military service record. That is why checking the military service records of your candidates is also important.
• Compensation Record: Checking the candidate’s compensation claims from past employers is also significant before hiring an employee.

Measures to take for Employee Background Checks

Having a proper flow chart of different steps

• Organisations must have a consistent policy for the employee background check, and for this, responsible authorities should know about the different steps they need to follow for background verification. A flow chart of all the steps is often used for this measure as they are easily comprehensible across the board. 

Legal Assistance to understand the role of Local Laws in Employee Background Check

• An assortment of confidential data is involved in the background check which is why taking legal Assistance will help avoid many sorts of legal complications.

Opt for FCRA Compliant Employee Background Check

• As FCRA (Fair Credit Reporting Act) determine what you can and cannot do in your employee background check proceedings and govern all the background checks, organisations must ensure that they follow FCRA’s rules and regulation.

In case of any mistake or misunderstanding, allow a candidate to Clear Up that.

• There are instances in which the data an employer has received can be incorrect; it is important to offer the chance to a candidate to rectify those misunderstandings as it determines a prudent and productive practice.

Being aware of the difference b/w Investigative Consumer Reports and Reference Checks

• If you reject a candidate because of the Investigative Consumer Report, the candidate needs to be provided with a copy of that report. However, if the information was obtained via reference check, such as asking past employers, you need not give such details to the candidate.

Academic references Checking

• Academic circles and experience are easily exaggerated and manipulated areas in recruitment and can be problematic and at times difficult to identify. Therefore, the prospective employer ought to start their reference check from this point. Undeniably, there is no need whatsoever to employ an applicant who is not honest regarding their academic qualification as they would not be productive and are likely to have ill motives. Consequently, they could be a liability to your organisation. This kind of candidate cannot be trusted at all, and therefore there is no need why the employer should. However, it would be to think such an individual for their interest in your organisation, but never should one hire them.

Call current and former supervisors.

• At times, it can prove difficult to extract any information about an applicant due to some legal handles and the fear of being sued for character defamation or even libel where the information which would be given might be negative, especially from either the current or former employers of your prospective candidate. However, it is worthwhile to find out as the data available at your disposal allows for sound and appropriate decisions to be made for the benefit of both the organisation and other members of staff.

Checking one’s network of associates

• Undeniably, for those who have been in the personnel management department, it is most likely that they have a vibrant network of associates, friend colleagues and family members who would be willing to share information about a prospective employee. It is therefore essential and significant to gather information from them. It would not be surprising that one might even get more information from such people.

Browse online sites

• With the use of the internet and using several search engines or numerous social sites, one is likely to find crucial and critical information that would go a long way in facilitating the employer get sufficient data about either the applicant or the organisation that they have worked or claim to have worked for.
• This information might range from positive to negative, thereby allowing the employer to make the right decision. Undoubtedly, the internet is a sure and free source of data that any prospective employer should employ in doing a background check.

In conducting employee background checks, there are some golden rules that one needs to observe to avoid any legal and challenges in executing the duties of their human resources and making the background check most effective and efficient. These do and don’ts include but are not limited to:

Do’s

• Having a consistent background checks policy and detailing how the policy should be used.
• Getting legal advice on how to conduct background checks under the local legal framework.
• Giving the applicants a chance to clear up any faults or misconstructions appearing on their documentations and during the interview process is inconsistent with your background check.
• Employing the services of background check services compliant with the legal frameworks of your region
• Understanding the difference between background checks vis-à-vis investigative consumer reports.

Don’ts

• Avoid making decisions on using the background checks on an applicant-by-applicant basis.
• Avoid the assumption that some parts of the background check process routine
• Avoid making decisions without letting the applicant a chance to respond.
• Avoid assuming that any companies seeking information about an individual are legally compliant.
• Avoid requesting information about the character or personal and private of an individual while verifying the historical employment facts.

Fundamentally, employee background checks are not too viewed superficially as they play an important role in ensuring that neither the employer nor the organisation encounter loss or legal handles in exercising their mandate and role. Consequently, by attracting competency and matching the skills with the tasks, employers ensure that their organisations remain profitable and are sustainably produced and competitive in their respective fields.

Finally, the most critical information that these background checks elicit are vital and are diversified in range and scope depending on the tasks to be performed and are as follows:

Criminal Records

Indeed, background checks are instrumental in providing information about the individual, which would inevitably be vital, especially where the candidate is required to handle or maintain important levels of trust, confidentiality, and security. Consequently, this kind and level of reliability would not be forthcoming from a criminal record person.

Social Security Validation

Apart from and the individual being tax compliant, background checks guarantee the legitimacy of the applicant’s social security number. The Social Security Validation facilitates in and discovering of all the names, as well as aliases and any variations thereof, dates of birth in addition to the history addresses associated with the applicant.

This limits the incidents of the employer contracting an individual who has a criminal record or does not have any legal status of seeking and getting employed in that country or region. Further still, it provided information on whether the candidate has ever lived in unrevealed places or under other pseudonyms that could divulge unlawful records that wouldn’t have otherwise been established.

Address History

Address History background checks help in tracing prior addresses where the applicant could have resided and facilitated the establishment of where else the applicant could have lived, making it easier in the verification of their true identity and may form the basis of further interview questions as well as getting to know the candidate better.

Terror Watch List

With the prevalent threat of terrorism and the global danger posed by terrorists, a thorough background check is more likely to establish if your potential employee could have been involved in terror acts or whether they are in any country or even states terror watch list. Although this was explicitly imperative for security jobs, it has been deemed necessary in almost every profession due to the changing dynamics and tactics employed by terrorists and other criminal syndicates in the twenty-first century.

Sex Offender and human trafficking Registry Check

With the ever-increasing levels of human trafficking, child pornography, organ harvesting, paedophilia and sexually related abuse globally, it is paramount that for positions dealing with minors, the marginalised and the most vulnerable through background checks are a necessity rather than just an option to ascertain the credibility of the applicant to avert and reduce the prevalence of the vices above.

Necessities for conducting Employee Background Checks

• You need to have your full name, date of birth, and Social Security Number for doing a background check.
• If you want to check credit reports, military records, and school transcripts, you need the candidate’s permission.
• If you hire an outside company to do the background check, you need to take the candidate’s permission.
• If the candidate denies the permission, you will be entitled to take the candidate out of consideration for that job profile.

Are There Any Disadvantages?

One of the major disadvantages that you can see is the wastage of time and money. The organisation invests large sums of money in conducting such investigations, and most of the time, the person turns out to be a genuine one and with the time it takes to conduct these checks, the candidate may think that the organisation is not interested and hence, they may join some other organisation in this period.

Judging a candidate on their background deeds may not always prove to be fruitful either. It may happen that a candidate got trapped in a criminal, offence and in an actual sense, they are a gem of a person. But when you do not know the candidate personally, you will focus on the verification reports and let a genuine person go.

Opting for an employee background check depends on the type of your business and the kind of job profile you are going to hire that candidate. Getting an employee background check has become eminent today because there have been so many instances each day.  They are getting the verification done to get the employer the satisfaction that they are selecting a genuine person and will not hamper the reputation and environment of the company.

If there is still any uncertainty in your mind about conducting employee background checks, why not reach out to us? CRI Group has experts across the globe from all backgrounds who are trained to provide you with specialised, expert advice fit for your business needs. Get in touch today!

GET IN TOUCH

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Ethical code of conduct: What should be covered?

Business leaders are usually quick to communicate their expectations to employees, especially when it comes to financial goals or tasks that they want to be accomplished. However, what is often lacking is a clear, concise explanation of what the organisation expects in terms of ethical behaviour. The recent article “Puffery or Not? Courts Examine Corporate Codes of Conduct” explains that although a number of federal courts have found code of conduct statements to be non-actionable puffery, given the uncertainty in the face of the novel CODIV19 pandemic, public companies are ought to review their codes of conduct and revise them if necessary to mitigate litigation risk. Ethical code of conduct:

Does your organisation have an ethical code of conduct? If not, you might be making assumptions that your employees know to conduct themselves in an ethical manner, when, in fact, this expectation only exists in a grey area in their minds – if at all. In fact, some employees who have engaged in fraud, corruption or other unethical situations have claimed that while they knew their behaviour was wrong, they thought it was implicitly accepted by their bosses and, in some cases, their company overall.

Rather than assume that ethical rules “go without saying,” every organisation should spell out what they expect of their employees when it comes to ethical behaviour. At CRI Group, we counsel business leaders on the principle that every organisation should have a written, carefully considered ethical code of conduct as part of their fraud prevention strategy. CRI’s Certification program through the ABAC Center of Excellence includes developing an ethical code of conduct as part of the training and development phase for clients.

What should be covered?

An ethical code of conduct should be tailored to your company and your organisation – no two will be the same. What are the risks inherent in your organisation? What about in your industry? A pharmaceutical company will have some different risk areas than a retail store, for example. A nonprofit organisation might have concerns that relate to fundraising, a government agency might be focused on preventing bribery or collusion.

The goal of an ethical code of conduct is to help all employees understand the expectation that they always behave in a legal and ethical manner, and that the organisation has zero tolerance for unethical behaviour. It should include the following focal points:

1. Business values

This can include your organisation’s mission and vision and should help set the tone for how the organisation relates to its clients, partners, its own employees and the public at large.

2. Guiding principles

The principles that guide your company include customer satisfaction, financial success and profitability, improvement and growth. Your company might also follow policies of corporate responsibility, such as respect for social and environmental issues, and support of the community and/or nonprofit efforts.

3. Role of leadership

This section of the code of conduct should state that management has clearly endorsed the code and that employees can approach any manager or executive with ethical concerns or complaints.

4. Regulatory and compliance

This section should communicate the organisation’s commitment to meeting all compliance requirements, from OSHA and EPA to Sarbanes-Oxley and Dodd-Frank. This reinforces leadership’s expectation that employees must act diligently and ethically to uphold those standards, as well.

5. Employee responsibility

Every employee, from top to bottom, shares the responsibility toward upholding the ethical standard defined in the code. Contractors and volunteers are also expected to follow the standard of behaviour.  Furthermore, the code should make clear that if the unethical behaviour is detected, turning a blind eye or deciding “it’s not my problem” is unacceptable. That is a breach of the ethical code.

CRI Group can help your organisation with the finer points of drafting and implementing an ethical code of conduct. ABAC Center of Excellence includes this critical piece as a part of any robust fraud, bribery and corruption prevention program.

After the ethical code of conduct is approved by company leadership, it should be read and signed by all employees (with the signed copies kept on file by the organisation). And it should be displayed prominently in the office. Unethical behaviour, including fraud and other corruption, is everyone’s problem, and it must be prevented, detected and reduced. Staying one step ahead of any critical risk to your organisation is part of being an effective business leader.

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 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.

Filed under: Automotive, Aviation, Background Investigation, Compliance Solution, COVID-19 Insights, Due Diligence, Employee Background Check, Finance & Professional services Industry, Insurance, IT & Telecommunications, Oil, Gas & Energy, Pakistan, Karachi, Pharmaceutical & Healthcare, Property, Resources, Third-Party Risk Management, United Kingdom, London by admin
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Building a Resilient and Defensible Third-Party Risk Management Compliance Program

Third-Party Risk Management Compliance Program:

Does your business have a Third-Party Risk Management (TPRM) Compliance Program? Are you establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business?

It’s highly probable that, at some point, organizations that affiliate with outside providers will eventually have to deal with an operational interruption resulting from third-party related issues and inappropriate conduct. The risks involved in partnering with outsiders hasn’t changed over the centuries. It’s the potential liability that’s been ratcheted up several notches. International borders have been ripped down. Technology has improved the way businesses communicate.

Easy access to data and information enables the media to report on business news before a business can properly respond. And the markets are quick to form opinions based on a 24/7 on-demand news cycle. The result of this increased liability is problematic. Business litigation has skyrocketed. Corporate reputations are constantly being assaulted. Business strategies are forever shifting. Board members are increasingly subjected to intense scrutiny from outside critics, and a highly educated market responds immediately with their pocketbooks.

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Discover How to Demonstrate a Resilient and Defensible Third-party Risk Management Compliance (TPRM) Program with 3PRM™ Services

CRI® Group has a network of local subject specialist operatives across the Middle East, Europe, South American and Asian regions to extend a helping hand and offer enhanced integrity due diligence being pre-emptive measures against:

• Experiencing financial loss when a third-party provider failed.
• Losing customers because of poor-quality service from a third party.
• Exposing breaches to data systems because of poor information security practices by a third party.
• Experiencing supply chain issues due to poor disaster recovery procedures by the third party.
• Being exposed to litigation because of relationships with an outside provider significantly violated contractual terms, potentially resulting in regulatory exposure.

When Working with third-party providers, CRI® Group designed a solution: 3PRM-Certified™. This proactive approach includes Integrity Due Diligence, Enhanced Due Diligence, Anti-Bribery and Anti-Corruption Compliance Solutions (incorporating ISO 37001 Anti-Bribery Management System accredited certification and training) to mitigating the risks involved with third-party affiliations to protect the organization from liability, business interruption and brand damage.

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WHEN TO CONDUCT THIRD-PARTY SCREENING?

3PRM-Certified™ A Third-party Compliance Verification and Certification Program

As the risk for data breaches and supply chain disruption continues to rise with COVID-19, so does the need for effective third-party risk management (TPRM) programs. Whether you’re a TPRM professional looking for a certification to advance your skillset, or the leader of your organization considering how to better equip your team with the best knowledge and skills, the 3PRM-Certified™ program is an all-in solution.

Our 3PRM™ service is flexible, and we tailor our scope to address an organization’s specific concerns and risk areas. Our extensive solutions include due diligence, employee pre- and post-background screening, business intelligence and compliance, facilitating any decision-making across your business no matter what area or department. Get ahead of any potential problems down the road with suppliers, contractors, and other third-party partners. Contact CRI® Group today and learn more about our third-party due diligence and risk management solutions.

CRI® Group’s exclusive 3PRM-Certified™ solution provides the very best in third-party risk management. Our 3PRM-Certified™ program provides a proactive approach to mitigating risks from third-party affiliations, protecting the organization from liability, brand damage and harm to the business. The 3PRM-Certified™ program includes a focus on the following:

• Providing third-party risk assessments
• Meeting contracting requirements
• Conducting due diligence
• Identifying potential fraud risks
• Providing management oversight

Utilizing a network of trained professionals positioned across five continents, CRI Group’s 3PRM services utilise one of the largest multi-national fraud investigation teams the industry has to offer. The 3PRM-Certified™ program is especially critical when your business is performing pre-merger and acquisition research and pre-IPO due diligence, engages new clients, employs, contracts or retains foreign business partners and requires a consistent and audit-worthy AML and anti-corruption compliance program.

This TRM Strategy program will help organizations establish the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. Third-party relationships are critical in business today and include partnerships with suppliers, distributors, consultants, agents and other contractors. While such affiliations are essential to the success of your organization, the business cannot overestimate the consequences of inadequate due diligence.

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Inadequate Procedure 

December 2013: Over US$2.8 million for failing to have in place appropriate checks and controls to guard against the risk of bribery or corruption when making payments to overseas third parties, breaching the FCA’s principle on management and control. Between 19th February 2009 and 9th May 2012, the organisation received almost $33 million in gross commission from business provided by overseas introducers and paid them over $18 million in return.

Inadequate systems around these payments created an unacceptable risk that overseas introducers could use the payments made for corrupt purposes, including paying bribes to people connected with the insured clients and/or public officials.

Regulatory action is not a US or UK phenomenon alone but is increasingly becoming a global issue. Regulatory thinking around third-party risks in some other jurisdictions is highlighted below:

• Singapore: The Monetary Authority of Singapore (MAS) has stated that it “is particularly interested in material outsourcing which, if disrupted, has the potential to significantly impact an institution’s business operations, reputation or profitability and which may have systemic implications.”
• Australia: The Australian Prudential Regulatory Authority (APRA) aims to ensure that all outsourcing arrangements involving material business activities entered into by a regulated institution are subject to appropriate due diligence, approval, and ongoing monitoring.
• Hong Kong: The Hong Kong Monetary Authority (HKMA) states that institutions “should not enter into, or continue, any outsourcing arrangements [that] may result in their internal control systems or business conduct being compromised or weakened after the activity has been outsourced.” – Source: Deloitte Report

Let’s Talk! If you have any further questions or interest in implementing compliance solutions, please contact us.

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 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 organizations. Contact ABAC® for more on ISO Certification and training.

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Due Diligence: 4 Red Flags of Collusion

One of the many schemes that can cause serious legal and financial consequences is collusion in business. While some business leaders might wonder what separates collusion from other types of fraud and how to identify it, there is a key factor: secrecy. 

Collusion involves at least two parties (sometimes more) who collaborate to deceive others, usually for financial or market gain. Due to its secretive nature, collusion can be difficult to detect and weed out. This poses a serious problem because the consequences of noncompliance for an organisation are often severe.

According to the Wall Street Journal, the U.S. Department of Justice (DOJ) is “preparing to tackle competition issues in several important markets, including alleged price-fixing in the generic-drug industry, rules for music licensing and purported employer collusion that limits options for sought-after workers” (Wall Street Journal, 2020). Indeed, these are the types of schemes that are most often associated with collusion. Price fixing is a global problem found in many different industries, for example. However it’s important to note that collusion is just as common at the local level – for example, where contractors bid to provide goods or services regularly. Sometimes competitors will engage in collusion by making secret arrangements to rotate bids or share bid details to artificially deflate prices.

In one recent case, the branch manager for a U.S.-based insulation contractor pleaded guilty in a scheme to rig bids and commit other forms of fraud on insulation contracts. The DOJ had launched an investigation into the branch manager’s actions from 2011 to 2018, finding that he “conspired with other insulation installation contractors to rig bids and engage in fraud on insulation installation contracts in Connecticut, New York, and Massachusetts. Insulation installation contractors install insulation around pipes and ducts on renovation and new construction projects at universities, hospitals, and other public and private entities. In addition to his guilty plea, DeVoe has agreed to pay restitution” (DOJ, 2020). “Free and open markets are the foundation of a vibrant economy. For years, the defendant illegally coordinated bids on construction projects to enhance his profits, eliminate competition, and ultimately steal from public and private customers,” said Brian C. Turner, Special Agent in Charge of FBI’s New Haven Field Office.

The DOJ noted in its press release that this crime hurt the hospitals, universities and businesses that solicit and pay for the contractor’s services under the expectation that the bidding process is fair and above board, not rigged to benefit a contractor at their expense. The money lost in such schemes (through paying inflated contracts) often represents taxpayer dollars. The fact that collusion, in this case, lasted for at least seven years indicates that tens of thousands of dollars (or more) were likely lost through fraud.

So, what can organisations do to be better protected from collusion schemes – whether from inside their own company or perpetrated against them by outside partners/contractors? While collusion is secretive by its very nature and can be difficult to detect, red flags can indicate that something might be amiss. CRI® Group’s integrity due diligence experts are specially trained to uncover collusion in all its forms, and they describe the following as some of the signs to watch for when dealing with competitive bid contracts:

A high percentage of awards go to the same company

If a single bidder is winning most of the contracts for a particular set of goods or services, there might be something wrong despite several other contractors involved in the bidding. This is especially true if there are any issues or complaints around the bidder, such as poor quality products or services, they are late in delivering on their contracts, etc.

Lowest bidders are not winning awards

Suppose the contracts are consistently going to bidders other than the lowest bidder. In that case, this might warrant further investigation – as most contracts are considered “low bid” and would reasonably go to the lowest bidder. Also, if there is a higher-than-average range or spread between bidders, that could signal that something is off.

There is a high number of late bidders

Late bids can be a sign of collusion if bidders, or an agent at the organisation soliciting bids, are sharing bid information – such as the highest bid (so far) in an award process. This is especially true when the winning bidder is consistently the last one to submit bids. If late bidders are being approved regularly, you need to know why.

Bidders share (or have similar) names, addresses, or other information

This is an obvious red flag. In some cases, bids from two different contractors have been submitted from the same fax machine! This indicates that parties might be colluding in their bid submissions, and you need to look further.

Other countries’ DOJ and enforcement bodies have demonstrated their willingness to detect, investigate, and punish collusion. For the sake of your organisation, it is best to be proactive when it comes to your bidding and contract processes. CRI® Group’s integrity due diligence services can help you identify the above red flags. Our experts also conduct risk assessments to help find weaknesses in your business process and controls that might make your organisation vulnerable to collusion. This holds whether you need the goods or services or are a supplier or contractor submitting bids. The secret crime of collusion causes financial harm through inflated costs, representing a legal and financial liability to your organisation and/or clients. By being attuned to spot red flags, you’ll be more likely to notice the smoke …. before it turns into a fire.

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About Us

CRI® Group has safeguarded businesses from any risks, providing investigations (i.e. insurance fraud), employee background screening, investigative due diligence, business intelligence,  third-party risk management, forensic accounting, compliance and other professional investigative research services. 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. Contact ABAC® for more on ISO Certification and training.

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