Corporate fraud and corruption is growing in United Kingdom (UK). In a devastating article, Oliver Bullough proved that UK is quickly becoming the money-laundering capital of the world. In addition, the most recent The Guardian article “If you think the UK isn’t corrupt, you haven’t looked hard enough” by highlighted that billions of pounds of COVID-19 contracts issued by the government without competition, have reportedly cost taxpayers £800 for every protective overall delivered, and appear to have been issued to dormant companies, with several of them have benefited from this largesse are closely linked to senior figures in the government. Read more about the situation in UK in the answers to the following questions:
- To what extent are boards and senior executives in UK taking proactive steps to reduce incidences of fraud and corruption from surfacing within their company?
- Have there been any significant legal and regulatory developments relevant to corporate fraud and corruption in UK over the past 12-18 months?
- When suspicions of fraud or corruption arise within a firm, what steps should be taken to evaluate and resolve the potential problem?
- Do you believe companies are paying enough attention to employee awareness, such as training staff to identify and report potential fraud and misconduct?
- How has the renewed focus on encouraging and protecting whistleblowers changed the way companies manage and respond to reports of potential wrongdoing?
- and much more…
Q. To what extent are boards and senior executives in your region taking proactive steps to reduce incidences of fraud and corruption from surfacing within their company?
Anjum: Business leaders in the UK recognise that being proactive against fraud and corruption is about more than just protecting the business – which is critical – but it is also a key component of growing and connecting to more opportunities. According to the World Bank, business grows an average of 3 percent faster where corruption is low. One way for organisations to demonstrate their commitment to preventing bribery and corruption is to engage in ISO 37001 certification. We expect to see more UK companies seeking certification and we expect this trend to increase as organisations look to set themselves apart from their competitors.
Q. Have there been any significant legal and regulatory developments relevant to corporate fraud and corruption in UK?
Anjum: Perhaps the biggest development, by extension, was the official beginning of the Brexit process and its potential impact on how the region continues to enforce and regulate against bribery and corruption. While the UK has a solid record thus far in combating fraud, the Organisation for Economic Co-operation and Development (OECD) recently warned that pressure from businesses to weaken bribery laws, coupled with an inability of the government to focus on non-Brexit issues, have increased the risks that bribery and corruption could increase.
The civil society group Corruption Watch has voiced similar complaints and has noted with concern new settlements that allow companies to resolve investigations with just a fine and an apology. The Serious Fraud Office (SFO) is tasked with policing this volatile landscape, and does so at a time when it has just appointed an interim director, pending the appointment of a new permanent director.
Q. When suspicions of fraud or corruption arise within a firm, what steps should be taken to evaluate and resolve the potential problem?
Anjum: Any allegation of fraud, including bribery and other forms of corruption, is very serious and requires expert handling. Only those trained in investigative techniques, including thorny issues such as evidence collection and the interviewing of witnesses and suspects, should be engaged to help establish the facts of the case.
To be clear, not all suspicions lead to fraud – trained investigators understand this, and will approach any allegations from an objective, fact-finding point of view. One critical thing to remember is that companies do not get a chance for a ‘do over’ if they bungle an investigation.
Q. Do you believe companies are paying enough attention to employee awareness, such as training staff to identify and report potential fraud and misconduct?
Anjum: We definitely see awareness of fraud and corruption moving in the right direction among business leaders and their employees. This is evident when companies engage in certification courses such as ISO 37001, which certifies that an organisation has implemented reasonable and proportionate measures to prevent bribery.
Q. How has the renewed focus on encouraging and protecting whistleblowers changed the way companies manage and respond to reports of potential wrongdoing?
Anjum: In the UK, there is a strong emphasis on encouraging and protecting corporate whistleblowers because the statistics show that fraud is most often uncovered by tips. Employees truly are the first line of defence against corruption. This change in approach and attitude has exposed two issues that need attention, however.
First, the worker needs to understand what constitutes fraudulent behaviour – otherwise, how will he or she know what to report? That is where a training protocol like ISO 37001 comes in, with a curriculum to help educate a company’s workforce on the red flags of fraud and how to identify it. Second, employees must know how to report fraud.
A hotline or other reporting system is useless if the company does not properly communicate how to engage it – or that it exists at all.
Q. Could you outline the main fraud and corruption risks that can emerge from third-party relationships? In your opinion, do firms pay sufficient attention to due diligence at the outset of a new business relationship?
Anjum: Many business leaders have learned the hard way that new partnerships require more than just handshakes, optimism and a basic level of fact-checking. To be protected, an organisation should engage an expert due diligence firm before undertaking any merger, acquisition, partnership or other third-party engagement.
Some of the risks of inadequate due diligence include merging with an international business embroiled in several behind-the-scenes legal battles, discovering your new partner is a credit risk, has claimed bankruptcy or is faced with debtor filings, learning that your new overseas contractor has none of the industry experience it claimed, affiliating with a partner that is rife with conflicts of interests and, worst of all, having your own organisation’s reputation damaged or destroyed through the actions of a third-party.
Q. What advice can you offer to companies on implementing and maintaining a robust fraud and corruption risk management process, with appropriate internal controls?
Anjum: No matter your location, industry or the size of your organisation, having a fraud and corruption risk management process is a must.
Step one is to establish a zero-tolerance stance against fraud. This is done by communicating the right ‘tone at the top’ across the entire organisation, spelling out the leadership’s stance against corruption. An ethical code of conduct should be adopted and signed by all employees from top to bottom, and the organisation’s hiring policies should include thorough pre-and-post employment background screenings.
The organisation should engage in ISO 37001 certification to ensure that employees are trained to recognise and report bribery and other types of fraud, and that proper controls and compliance procedures are in place to limit the company’s exposure and risk. Finally, the company should conduct regular audits, and encourage whistleblowing through an anonymous reporting system.
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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.
Meet our CEO
Zafar I. Anjum, is Group Chief Executive Officer of CRI® Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due diligence and employee background screening services for some of the world’s leading business organisations. Headquartered in London (with 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 safeguards 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, 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.
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: firstname.lastname@example.org
Download 2018 annual reviews by CRI® Group:
- Click here to download the review of UAE (Mr. Zafar Anjum, CEO at CRI® Group)
- Click here to download the review of UK (Mr. Zafar Anjum, CEO at CRI® Group)
- Click here to download the review of Pakistan (Ms. Fatima Farrukh, Compliance professional at CRI® Group)
- Download the Financier Worldwide 2018 reprint about the situation in the UK.