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News and Insights

Newsletters August 13, 2018 Business ethics & compliance Corporate responsibility Data protection Measuring corporate culture

Summer 2018

Corporate culture key to UK Governance Code

Following the publication of the new UK Corporate Governance Code last month, corporate culture looks set to become a boardroom issue. Under the section on leadership and company purpose, the code states that a board ‘must establish the company’s purpose, values and strategy and satisfy itself that these and its culture are aligned’.

To do this, boards will be required to assess and monitor culture. Where they are not satisfied that these are aligned, the board is now expected to ‘seek assurances that the management has taken corrective action.’ Any activities and action taken by the board should be explained in the annual report.

In our white paper Measuring Ethical Culture, we argued that while culture may appear intangible and hard to measure, boards need to find a way to do just that. This will involve identifying the right culture indicators to enable them to assess whether good corporate behaviour is properly embedded.

This approach is supported by the Financial Reporting Council’s guidance on the new code which urges boards to identify and track typical features of a positive culture. Based on our experience of assessing and measuring corporate behaviour, we have identified the key drivers of an ethical company culture and devised a methodology to assist boards with the new monitoring and reporting demands.

Read the blog in full

GDPR is not over

May 25th was not the finishing line for GDPR. So while much of the panic may be over, there is still work to be done to ensure compliance with the new legislation.

Elizabeth Denham, the UK’s Information Commissioner, describes GDPR as an ongoing journey that requires continuous effort. Businesses will be expected to “continue to identify and address emerging privacy and security risks in the weeks, months and years beyond May 2018”.

Our latest blog summarises five key reasons why GDPR isn’t over and outlines what organisations need to do to ensure long-term compliance.

Read the blog in full

An ethical future for AI

Despite the widespread use of AI across a range of industries and services, no country has established, as yet, an ethical or legal framework to govern its development.

AI is still relatively embryonic, but the pace of change is rapid and the investment considerable. It has the potential to transform economies and benefit humanity, but to do this successfully it will need to be both reliable and trusted.

Businesses and those at the vanguard of AI development cannot afford to wait for regulators to set the bar and define the ethical or regulatory framework. Our blog explores some of the key ethical considerations.

Read the blog in full

In Brief...

Latest Debate

With poor corporate culture perceived to be a business risk in itself, what should companies be doing to mitigate that risk and ensure they have the right culture in place?

Our summer business ethics debate explored the value, strategic importance and practicalities of measuring corporate culture.

As with all our debates, the summary is on the website.

Ethics & compliance benchmarking

Does your organisation have a stand-alone ethics and compliance function? Who does it report to? How often are due diligence checks carried out on third parties?

These are just some of the questions we posed at the session on compliance programme benchmarking that we moderated at the C5 Anti-Corruption event this summer. The results are available on our blog.

Safeguarding survey

GoodCorporation has conducted its first safeguarding survey, inviting a range of organisations to respond.

The survey aimed to discover how organisations govern, resource, assess and monitor safeguarding.

The results will be published in a forthcoming paper. We will also be inviting respondents to a safeguarding event in September to review the findings. Contact us for details.

Sapin II debate in Paris

Following the success of our debate on the challenges of implementing GDPR, GoodCorporation will be hosting another discussion in Paris in September.

This time the debate will focus on the demands placed on French businesses by Sapin II.

The debate will take place at the Salons France Amériques on Thursday September 13. Contact us for more information.

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Newsletters May 31, 2018

Spring 2018

Managing AI along ethical lines

Artificial intelligence (AI) is already transforming our lives and our workplaces; robots carry out dangerous and repetitive tasks, machine-learning algorithms are being used to improve medical diagnoses and many of our cyber defences are AI powered. This week, one of the UK’s biggest hospitals, University College London, announced that it plans to use AI to radically improve its services.

As intelligent machines evolve, so too do the ethical questions that should govern these developments. If AI machines make mistakes that cause harm, who should be held responsible? AI systems learn through access to data, so what does that mean in terms of our right to privacy? And who, if anyone, should be responsible for the output of AI ‘thought’ processes?

Rightly, these questions are being posed at both national and international levels. Our latest blog takes a look at the steps being taken to develop the ethical and legal framework to govern the use of artificial intelligence.

How businesses utilise AI will have a significant impact on how they are trusted by society. GoodCorporation is exploring the ethical considerations that should govern the evolution of AI technologies and will be publishing updates in this newsletter and on our blog. A strong ethical code will require a multi-stakeholder approach. We would value any thoughts on our blog or direct to our inbox.

 

Managing human rights risks

While the majority of corporates make a firm commitment to protecting human rights in their code of conduct, the nature of modern businesses, with complex structures across diverse locations, means that this can be a challenging pledge to fulfill.

To be sure that human rights policies are properly respected across all sites, companies need a robust monitoring programme as well as strong policies and procedures.

This can be easier said than done. Our article on creating a worker welfare programme to set your business apart looks at some of the issues routinely faced when checking human rights across an international business.

Click here to read the article in full

 

ESG and value creation

A corporate scandal can decimate share value and not just in the immediate aftermath as the gory details hit the headlines. Shareholders in Volkswagen, Tesco, Toshiba and Rolls Royce are still suffering damage some four years after the scandals emerged.

Not surprisingly, investors are increasingly looking for indicators of long-term sustainability that will help mitigate risks and protect long-term investments.

Investment analysis that focuses solely on financial performance is no longer sufficient. Instead we now see more and more investors analysing ESG-related indicators alongside financial performance. Our latest blog explores this trend and what it may mean for businesses.

Click here to read the blog in full

 

 

In Brief...

Stay up-to-date

If you haven’t recently signed-up to continue receiving our quarterly newsletter and occasional product updates, please click the button below.

These emails contain the latest thinking in business ethics, compliance and best practice, together with summaries of our recent debates at the House of Lords.

We will only use your details for the purpose of sending you this information.

Click here to receive our newsletters

New team member

GoodCorporation is delighted to announce the appointment of  Jane Ellis as a company director.

Previously head of the International Bar Association’s Legal and Policy Research Unit, Jane is an Australian-qualified lawyer with expertise in competition law, anti-bribery law, corporate governance, whistleblower protection, diversity and business ethics.

Read Jane’s profile in full

See us at C5

GoodCorporation is a sponsor of C5’s Anti-Corruption conference, in London in June.

Readers of this newsletter can receive a 20% discount by quoting the code P20-999-GC18.

The conference will look at UKBA and FCPA  enforcement, how to evidence adequate procedures and managing risks in emerging markets, among other challenging topics.

Register here

New address

Since our last newsletter, GoodCorporation has expanded into larger offices, hopping over Putney Bridge to Fulham.

Our new London address is 2-3 Melbray Mews, London SW6 3NS. Phone numbers and emails stay the same.

If you’d like to visit us or find out more about what we do, get in touch.

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Newsletters February 12, 2018 Bribery & corruption Business ethics & compliance Measuring corporate culture Taxation

Winter 2017/18

Criminal Finances Act increases pressure on businesses to demonstrate robust procedures

Effective since September 2017, The Criminal Finances Act places a new regulatory burden on corporates by introducing a criminal offence of failing to prevent the facilitation of tax evasion. As with the Bribery Act, this applies to the company or partnership and anyone acting for or on its behalf. Our business ethics debate in the Autumn explored the challenges that the Act brings, looking at the changes to culture, risk assessment, training and monitoring that the Act is likely to require in order to ensure a reasonable procedures defence. While much of the analysis has focused on the implications for lawyers, accountants and financial advisers, the offence will have a far wider reach than this in terms of who faces liability. Our blog takes a detailed look at the implications for business, covering the introduction of unexplained wealth orders, the extension of the suspicious activity report moratorium period and the enhanced ability of regulators to freeze and seize assets where there are grounds for suspicion. The Act also has far reaching consequences in terms of human rights, extending the definition of ‘unlawful conduct’ in the civil recovery regime to include gross human rights abuses. This means that UK prosecutors can freeze and seize assets alleged to be the product of a gross human rights abuse by an official or a person acting in an official capacity. This is a strict liability offence, so no defence is provided meaning that businesses have no choice but to ensure they have robust due diligence procedures that will uncover any risk of a connection to gross human rights abuses. Complying with a reasonable procedures defence can be challenging for companies. We have a framework for developing and implementing a robust system to ensure an organisation is properly protected. Contact us for more details.

David Green to lead our first business ethics debate of 2018

David Green will be opening the first GoodCorporation debate of 2018 which will examine the future of anti-corruption prosecution. As David nears the end of his term as director of the UK’s Serious Fraud Office, the debate will focus on where the SFO is heading and how Deferred Prosecution Agreements are likely to work, now that they have been established and tested. Hosted by Baroness Kingsmill, the debate will be held at the House of Lords on February 20. Attendance is by invitation only but please contact us if you are interested or would like to go on our invitation list for future events.

New social contract or better business behaviour?

Having spent much of 2017 reporting on increasing concerns around excessive executive pay, tax avoidance, zero-hour contracts and automation, the Financial Times (paywall) began the year by stating that capitalism needs a new social contract. This isn’t the first time that new rules of engagement have been called for. While a renewed focus on the social contract would be no bad thing, what we really need to change are the soft and hard laws that dictate business behaviour. Better regulation can and should lead to better businesses that operate for the benefit of all stakeholders. The Financial Reporting Council has the opportunity to effect change as it considers revisions to the Corporate Governance Code. We will be responding in due course, calling for stronger requirements around evidencing that an organisation’s culture is properly underpinned by the ethical values that drive responsible business behaviour. This argument is also made by Christopher Hodges and Ruth Steinholz in their new book Ethical Business Practice and Regulation. In it, they propose that that ethical business regulation which requires businesses to evidence a commitment to ethical business practice, can maximise good outcomes for all stakeholders. We wait to see if and how this might be might be addressed in the new in Corporate Governance Code. Contact us for more information on measuring ethical culture.

In Brief...

GoodCorporation to hold first debate on data protection in Paris

Following the launch of our Paris office at the end of last year, GoodCorporation is holding its first French business ethics debate on the subject of data protection.

Jean-Baptiste Siproudhis, Head of Compliance at Atos, will be leading the discussion which is being held at the Salons France-Ameriques at lunchtime on March 15.

With French data protection regulator the CNIL celebrating its 40th anniversary in the year that the GDPR comes into effect, it is clear that data protection issues are more central than they have ever been. Our debate will explore the challenges business face to be compliant with GDPR by May 2018.

GoodCorporation has been working with UK companies to help them prepare for GDPR. Our work has involved risk mapping, auditing existing systems, training and system development.

GDPR Ready?

Many companies have undertaken significant projects to change processes and systems to comply with the new EU General Data Protection Regulation that comes into force in May.

Attention is now turning to board assurances and the best way to demonstrate that their organisation is GDPR ready.

GoodCorporation’s Data Protection Framework is providing a number of our clients with a measurement tool for assessing the effectiveness of the systems in place.

We have also been working with companies to carry out detailed data mapping exercises. Data can easily be misfiled or stored without the necessary protections, so getting this right is essential. We look beyond where data ought to be stored and talk to staff to get a clear idea of how data flows through the organisation. This is also helpful for highlighting to senior management what is working and where improvements are needed.

To find out more, please contact Gareth Thomas who is leading our GDPR work and also view our GDPR readiness check.

Contributing to the debate

Following the publication of our recommendations to promote responsible gambling, GoodCorporation has responded to the UK Government’s gambling consultation.

We support the Government’s proposals to reduce maximum stakes on Fixed Odds Betting Terminals. In addition to the social responsibility measures put forward, we have recommended that more needs to be done around monitoring controls, training and self-exclusion. 

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Newsletters November 9, 2017

Update Autumn 2017

The responsible approach to data protection

From the work we are doing with our clients and the column inches devoted to it, we can see that preparing for the General Data Protection Regulation coming into force next May is taking up considerable bandwidth.

Data protection has clearly moved from being a back office function to a board agenda item. As the UK Information Commissioner has said, compliance is about more than just the legal obligation; good data management practices are about building consumer trust and responsible businesses within the digital economy.

Our view is that the law is driving a potential sea-change in terms of attitude. It is trying to put privacy at the heart of data management and trying to give consumers and citizens control over their own data. This will require a similar mind set change in business. It will not be enough to refresh privacy notices and ask for consent. Instead businesses will have to think like their customers – Who has my data?  What are they doing with it? Is it correct? How did they get it and am I happy for them to use it?

As part of our own preparations for the GDPR we will also be in touch about consent to receive our newsletter and you will see our updated privacy notice and cookie consent already on our website.

Leo Martin

Are French businesses ready for the challenges of Sapin II?

This was the subject of our fifth business ethics debate in

the Salons France Amériques in Paris. With the new french anti-corruption law placing tough new compliance requirements on companies, we asked if French companies are ready for the challenge and what difficulties they might face?

The debate provoked an interesting discussion as representatives from some of France’s leading companies discussed the practical challenges of implementing a robust compliance programme in a relatively short time. To read the full summary of the debate, in french, click here.

GoodCorporation has worked for many French companies, including six from the CAC 40, since our launch in 2001. To build on that expertise, we have now opened an office in Paris managed by a new member of the GoodCorporation team, Chloé Blais.

Chloé is the former head of the French- African compliance team for Louis Berger and former ethics manager in Total. Chloé has international experience in anti-corruption compliance, human rights, CSR programmes as well as considerable experience in West Africa.

The principles of good data protection

With fewer than 200 days to go, the General Data Protection Regulation (GDPR) clock is ticking ever more loudly.

Protecting data is nothing new and has long been regarded as an important tenet of responsible business management.

While the core principles of the GDPR are similar to those of the Data Protection Act, the obligations and practical applications of the new law require a far more rigorous data management regime.

As a result of these changes, the best organisations are spotting that this is not a job for a legal person, an IT person or a commercial person alone. Instead all three functions needs to be combined to make a GDPR project effective. However clear overall accountability is also key.

Most organisations are embarking on data mapping exercises to ensure they understand what data they collect, where it is held, who uses it and for what purpose. This considerable effort will be wasted if organisations do not have an overall commitment to privacy by design and this is seen as simply a paper-based exercise.

GoodCorporation has been working with clients to help review and assess their existing data protection procedures using our Data Protection Framework. We have worked on data-mapping, policy and procedure reviews, staff awareness assessments as well as designing communication, training and monitoring programmes.

From the work we have carried out to-date, we have identified ten key principles that are essential to GDPR compliance.

Click here to see the principles in full and here to find out more about our data protection compliance services.

In Brief...

Chatham House: Responsible Business 2017

The second annual Chatham House Responsible Business Summit is taking place in London on November 16th.

Michael Littlechild is chairing a session on managing human rights across global supply chains.

The session will focus on business practices and the regulatory and industrial strategies that govern adherence to human rights principles and norms.

Joining Michael for the panel discussion will be Mike Davies, director of Campaigns, Planning & Evaluation, Global Witness; Paula Pyers, Senior Director of Supply Chain Social Responsibility, Apple and Richard Howitt, CEO, International Reporting Council

To register for the event click here.

Business Ethics Debates

GoodCorporation is hosting two debates at the House of Lords in November, beginning with a debate that took place on the Criminal Finances Act on November 2.

Billed by Transparency International as having equal significance with the bribery Act in the global fight against corruption, we asked what impact it will have on the corporate legal landscape and what compliance challenges does it present?

Omar Qureshi, partner and head of corporate crime at Cameron McKenna Nabarro  opened the debate by discussing the key tenets of the Act and the procedures companies should be implementing.

Our second debate, being held on November 16,  examines whistleblowing. Caroline West, global chief compliance officer  for Olympus will lead the debate which poses the question “How can speak-up systems be truly effective in complex global organisations?”

Attendance is by invitation only, but do contact us if this is of interest.

Raising the bar on gambling controls

While the majority of gamblers do so safely, the Gambling Commission estimates that more than two million people in the UK are either problem gamblers or at risk of addiction.

The industry has a duty to protect these individuals, not just from an ethical or corporate responsibility perspective. It is also a condition of the licence to operate.

GoodCorporation has worked with leading companies in the sector so knows that good control schemes really can work.

The government has announced a further consultation on gambling controls. Our blog looks at the changes we think the government could be making.

AMLP Anti-Bribery & Corruption Forum

Gareth Thomas will be speaking at the sixth Anti Money Laundering Professionals Anti-Bribery & Corruption Forum taking place at Exchange House, City of London from 21-22 November.

Representatives from the OECD, SFO, Transparency International, Agence Française Anticorruption (AFA) will be joined by senior executives from leading international companies.

Click here for the full programme and to register. Our Update readers receive a 10% discount by quoting GoodCorporation when booking.

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Newsletters July 6, 2017 Bribery & corruption Data protection Human rights & modern slavery

Update Summer 2017

GoodCorporation strengthens human rights framework

GoodCorporation has been helping businesses to reduce the risk of human rights abuses occurring within their operations since it first launched the Business Ethics Standard in 2001.

As managing these risks has become ever more demanding we have revised our frameworks to help businesses strengthen their systems and processes as needed.

Our framework on managing human rights has just been updated to cover a wider remit and help organisations to identify, prevent and address any human rights issues arising from their activities and business relationships. It outlines a set of responsible management practices that can be implemented to demonstrate a commitment to respecting human rights, in line with the UN Guiding Principles. Best practice on policy and governance, the assignment of responsibilities, culture and awareness raising, managing relationships as well as monitoring and transparency are all included.

In addition to this framework, we have produced further guidance on respecting workplace and community rights which should be read in conjunction with the wider framework.

Contact us if you would like more information on this area.

Will the Modern Slavery Act help reduce modern slavery and can companies reduce the risks in their supply chain?

 

 

 

 

 

 

James Ewins QC led GoodCorporation’s debate on modern slavery which was hosted by Baroness Lola Young of Hornsey. He began with a closer look at the statute and an assessment of the effectiveness to date of reducing the risks in the supply chain.

Under the Modern Slavery Act (MSA), the criminal provisions have been consolidated with increased sentencing powers, protection for victims and reparation orders against those convicted of slavery. For corporates however, much of the focus has been on Section 54 – transparency in the supply chain. According to the Home Office, Section 54 was designed to enable organisations to be held to account, through modern slavery statements, for their actions to reduce slavery.

All those required to produce such statements under the new legislation should have now done so, but the response to these has been lukewarm. Some have included risk assessments, data and audit results, while others are bland and non-committal. But do they collectively meet the primary objective of facilitating civil society’s ability to hold companies to account and is this the right approach in the fight to eradicate slavery?

Our debate looked at this question, examining the likely impact of modern slavery statements and what businesses can be doing to reduce the risk of slavery in their supply chains.

Read the debate summary in full here.

How can companies overcome the compliance challenges of the GDPR?

Implementing systems and processes to meet the requirements of the GDPR is undoubtedly one of the major challenges currently facing legal and compliance teams.

Richard Brearley, head of compliance (EMEA) at Macquarie led our debate on the GDPR and began by looking at the likely impact of the new regulation and what will be needed to ensure effective compliance.

One of the biggest changes is the emphasis on the rights of the individual which may require a significant change for many organisations to the ways in which they collect, hold and transfer personal data.

Governance and accountability will be critical to effective GDPR compliance. This must become a board issue, with responsibility at the top of the organisation. Businesses will need to risk assess their data management systems, to ensure that individuals’ rights are protected and that the appropriate controls are in place.

Read the debate summary here and visit our website for more information on our data protection framework.

In Brief...

C5 Anti-Corruption London

GoodCorporation joined leading figures from the anti-corruption community to discuss some of the key compliance and enforcement issues dominating the anti-bribery agenda.

Gareth Thomas, who leads our work in anti-corruption and data protection, was on the “Challenge the Experts” panel discussing the difficulties faced by companies seeking to enter high-risk markets and the mitigation measures they should look to put in place.

Contact us for more information on our work in this area.

Corruption, DPAs and the prosecution landscape

This was the subject of our anti-corruption debate. Introduced by Lord Gold, the discussion began with the affirmation that the primary role of the UK Serious Fraud Office is to investigate and prosecute.

Deferred prosecution agreements (DPAs) were discussed in detail. These are likely to remain part of the SFO’s prosecution armoury despite the concerns expressed around self-reporting and in particular the loss of legal privilege.

Reporting was felt to be a significant issue. While some felt strongly that transparency is in the company’s best interests, with leniency when it comes to fines seen as a real incentive. Others felt the lack of immunity from prosecution for reporting and the fact that it hands control to the SFO, acted as a strong deterrent.

Click here for the full debate summary.

In the news

To make it easier to find articles, comment and opinion on a range of business ethics issues, we have revised the news section of the GoodCorporation website.

Visitors to the site can now search by subject area to see a range of advice and comment piece on a variety of business ethics topics.

The subject areas for our comment and opinion pieces include bribery and corruption, ethics and compliance, human rights and modern slavery, data protection, whistleblowing and corporate governance.

We have also updated the case histories section of the website, grouping our case studies around the areas in which we operate.

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Newsletters May 11, 2017

Update Spring 2017

Measuring corporate culture

The Financial Reporting Council’s report on corporate culture and the role of boards describes the loss of trust in business since the financial crash and the important role for boards in ensuring that an ethical culture is in place in order to deliver long-term success.

This need is reflected in the UK Corporate Governance Code which describes the establishment of an ethical corporate culture as one of the key roles of the board.

The high-profile corporate scandals of the recent past illustrate how damaging an unethical culture can be, but the challenge for boards is how to assess and measure culture so that problems can be identified and addressed.

Since 2000, GoodCorporation has been using the Business Ethics Standard to help companies measure ethical conduct in business. Over 600 assessments have been carried out to date in more than 60 countries, with many UK and international organisations using the standard, or variants of it, to help evaluate and measure responsible business practice.

GoodCorporation has now developed a tailored two-part assessment to help boards measure their corporate culture. Assessment using this process will enable companies to identify any problems and work with GoodCorporation to put mitigation strategies in place. We are also developing an ethical culture benchmark, to enable organisations to benchmark their performance against their peers. To talk to us about this service, please contact us via the GoodCorporation website.

Getting data protection on the board agenda

Changing data protection laws are placing greater responsibility on organisations to take broader and deeper accountability for their handling of personal data. The EU General Data Protection Regulation (GDPR) comes into effect in the UK in just over 12 months’ time as both the Information Commissioner’s Office and the UK’s digital minister have confirmed.

However, a recent survey has claimed that a quarter of all business have cancelled their GDPR preparations because of Brexit on the misplaced assumption that the regulation will not apply. This approach could put businesses at risk from the heavy financial penalties of the GDPR.

The UK’s response to the GDPR is that its requirements are consistent with best practice for handling data. It is currently covered by The Great Repeal Bill and will apply in full until the UK Government chooses to review its domestic data protection laws.

GoodCorporation works with organisations to help them put adequate procedures in place, using our data protection framework, to ensure that robust policies and procedures to protect data are in place. Reports are produced containing performance grades and recommended actions. Contact us for more information or to receive a copy of a sample report.

GoodCorporation assessment work helps demonstrate effective ABC programme to debarment monitor

GoodCorporation has been working with a global organisation, head quartered in the UK, to review it’s anti-bribery and corruption (ABC) policies and procedures following a three year monitorship imposed because of bribery allegations in an overseas territory.

To ensure that the new ABC regime was robust and would provide proper protection moving forwards, the audit committee requested an independent assessment of policies and procedures at group level. GoodCorporation assessed the new programme against the GoodCorporation ABC Framework to identify any gaps and provide a score for each process tested. The findings were then mapped against GoodCorporation’s ABC benchmark to indicate effectiveness compared to other international organisations.

Read the case history in full on our website.

Why child protection and safeguarding is a corporate issue

The first GoodCorporation business ethics debate of 2017 examined the responsibility of corporates to ensure that robust child protection and safeguarding procedures are operating in their organisations.

Sir Roger Singleton, former chief executive of Barnardo’s and chief adviser to the Government on the safety of children, introduced the debate topic with a summary of the key factors central to a meaningful understanding of safeguarding. The discussion centred around the problems many organisations face in embedding good safeguarding practice. Advice was also given on the changing nature of abuse, the importance of knowing the signs and the need to promote safe practice through good training and communication.

A full summary of the debate is on the GoodCorporation website.

In Brief...

How to measure corporate culture effectively?

GoodCorporation lead a roundtable discussion on measuring corporate culture at Citi’s offices in Stirling Square on Friday 5th May.

With investors increasingly looking at optimal ways to measure culture, companies are turning to effective ways of measuring and communicating the health of their own culture.

The discussion focused on existing indices for measuring company performance, their effectiveness as indicators of culture and how meaningful KPIs might be obtained using GoodCorporation’s methodology. Contact us for more information.

Who's afraid of the GDPR?

GoodCorporation posed this question at our latest business ethics debate at the House of Lords.

Richard Brearley, head of compliance (Europe, Middle east, Africa) at Macquarie Group lead the discussion which was attended by general counsel and heads of data protection and privacy heads from leading UK and international companies.

A summary of the debate will be included in our next issue. Contact us if you are interested in attending these events in the future.

Barclays whistleblower scandal shows more needs to be done to reform banking culture

GoodCorporation described the recent whistleblower scandal at Barclays as a real test for the Financial Conduct Authority and the Prudential Regulation Authority.

In a press statement that was picked up by the media, GoodCorporation described whistleblowing as an “essential component of good corporate governance that needs to be embraced at the top of an organisation”.

Effective boards need to ensure that the right culture is in place. Giving employees the confidence to speak out will allow employees to act as the eyes and ears of an organisation who can spot and report on misconduct as soon as it starts.

Read the comment in full.

First Corporate Human Rights Benchmark reveals weaknesses in practice

The publication of the first Corporate Human Rights Benchmark indicates that companies still have a long way to go in the implementation of effective human rights programmes.

Of the 98 companies included in the benchmark, only six  had scores above 50 per cent and only 18 had scores over 40 per cent.

The benchmark shows a clear gap between the leaders and the laggards, with many companies receiving a zero score against the indicators.

Business’ licence to operate is under more scrutiny than ever before with society showing a zero tolerance approach to human rights abuses.

This is backed by increasing legislation requiring corporates to manage their human rights impact more effectively. France has recently passed its Duty of Vigilance law; Australia is considering its own version of the UK’s Modern Slavery Act and the Dutch government has approved a new law on child labour.

Click here to read more

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Newsletters February 24, 2017

Winter Update 2016-17

Rolls-Royce case is a game-changer for DPAs

Approval of the Deferred Prosecution Agreement (DPA) between Rolls-Royce and the Serious Fraud Office (SFO) was a significant decision, described as a ‘game-changer’ both for the SFO and for businesses.

The reasons for its significance are manifold. First, it is the highest penalty ever levied against a UK company for criminal conduct, comparable to fines imposed by the US Department of Justice and so transforming the SFO into one of the big-hitters of corporate law enforcement.

Second, it confirms that DPAs can be available whether or not the company has self-reported; Rolls-Royce only self-reported once the SFO had begun to investigate on the evidence of a whistleblower.

Third, it shows that co-operation can have a meaningful impact on the potential penalty. In securing a DPA, not only did Rolls-Royce avoid prosecution but the fine levied was 50 per cent lower than it might have been, despite DPA guidelines providing for reduction of up to one third. In reaching his judgement, Sir Brian Leveson approved this further discount on the penalty in light of the company’s extra-ordinary co-operation.

This judgement sends a clear message to companies that DPAs are an attractive proposition far outweighing an early guilty plea. However, more work still needs to be done to incentivise companies to report, given the discounts awarded.

What the case also shows is that co-operation and adequate procedures are vital. Rolls-Royce conducted a comprehensive internal investigation, made available to the SFO with a waiver of any claim for legal privilege, which brought to light conduct which otherwise may never have been exposed.

The company was also able to demonstrate that the senior managers in place were not responsible for decisions taken during the relevant period and were committed to instigating wholesale changes and a major new compliance programme.

Lastly it is worth noting that a condition of the DPA is that Rolls-Royce fully cooperates with the SFO as needed with the prosecution of its former employees highlighting the potential for a conflict of interest between the organisation and its senior team.

GoodCorporation has undertaken a number of projects for clients who are dealing with the SFO. Often working in conjunction with external counsel, GoodCorporation has helped to benchmark their clients’ ABC programmes to help evaluate whether or not they were adequate and how well they compared to a group of over 70 anti-corruption assessments we have conducted. In addition we provide clients with investigations support where requested. Contact us for more information.

Can adequate procedures really prevent bribery?

The final GoodCorporation Business Ethics Debate of 2016

asked whether a robust anti-corruption compliance programme can change behaviour and prevent bribery, or is it just an insurance policy?

Dan Silver who has run global compliance teams in the oil and gas sector led the discussion by presenting both sides of the argument. While there has been significant investment in anti-corruption compliance programmes to provide clearly documented audit trails, this insurance policy approach has led to something of a compliance ‘arms race’ with more paperwork created in a bid to keep the regulator happy.

However, what we are increasingly seeing is that organisations are now moving to strengthen culture and values out of a desire to alter behaviour and drive real change.

In the debate a number of issues emerged which are difficult to manage, even for those organisations committed to implementing a strong ABC culture, including monitoring agents and intermediaries and conducting supplier audits.

As our debate summary shows, most agreed that preventing bribery will be a two-stage process, with documentary evidence needed as step one, followed by a wider change in culture and behaviour to drive up standards over time.

GoodCorporation works with clients to support acquisitions

When an organisation purchases a public limited company, the amount of due diligence that can be undertaken before the acquisition is finalised can be limited.

Consequently the purchaser may need to conduct further investigations of the acquired company once the deal has been done to ensure that any bribery risk or other wrong doing can be identified.

GoodCorporation has conducted such due diligence investigations to help ensure that the buyer has all the necessary information to assess and manage risk across the new organisation. Contact us for more information.

In Brief...

How should businesses safeguard children?

David Beckham’s condemnation of child abuse in football on Desert Island Discs is a reminder that while there is a framework for protecting children in the UK that is firmly rooted in legislation, policy and principles, child protection is everyone’s responsibility.

Safeguarding children is multifaceted. For organisations who work or come into contact with children, preventing abuse must be a high priority that is carefully risk assessed to ensure that proper systems and processes are in place to prevent abuse.

Our recent blog outlines the processes an organisation can put in place to safeguard children.

GoodCorporation has a  framework on safeguarding children and has worked with the BBC to review the Corporation’s safeguarding and whistleblowing procedures.

Are businesses doing enough to safeguard children? will be the subject of our first Business Ethics Debate of 2017 taking place at the House of Lords on February 28. Attendance is by invitation only.

GoodCorporation increases its work in safeguarding

As part of our child protection work, GoodCorporation is conducting a review of the safeguarding and data protection policies of Safe Child Thailand, formerly known as the Thai Children’s Trust.

For over 30 years, Safe Child Thailand has supported organisations that care for the country’s poorest and most vulnerable children.

It sustains a range of projects which provide specialist help for children who have been orphaned or abandoned or who are battling with disabilities or serious illnesses.

Are Dutch companies doing enough to combat corruption?

GoodCorporation has hosted its first Business Ethics Debate in the Netherlands.

In light of the recent bribery scandals involving Dutch businesses, we asked if enough is being done to prevent bribery.

Aldo Verbruggen, a partner at Jones Day who specialises in corporate criminal investigations, led the discussion.

Aldo began by suggesting that Dutch companies are wrongly perceived as being ‘pure and innocent’.

The majority felt that Dutch businesses in general are not doing enough to combat corruption and that the authorities should strengthen legislation.

Attendees were split however on whether or not they felt their own organisations were doing enough to tackle corruption.

While the Netherlands still ranks among Transparency International’s least corrupt countries, it is perhaps worth noting that this year it slipped from 5th to 8th in the 2016 Corruption Perceptions Index.

Read the debate summary in full.

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Newsletters November 9, 2016

Update Autumn 2016

New plans to tackle corporate fraud will create even greater need for adequate procedures

Failure to prevent economic crime looks set to become a corporate offence. This follows the announcement by Attorney General Jeremy Wright that the proposed consultation would go ahead on extending the criminal liability of corporates for failing to prevent bribery to other economic crimes, including money laundering, false accounting and fraud.

It is expected that the new offence will be modelled on Section 7 of the Bribery Act, meaning that a company will only have a defence if it can show that it has adequate procedures in place to prevent the specified economic crimes.

The range of crimes could be broad and it is likely that the new legislation would hold organisations responsible for the actions of third parties or associated persons acting on the company’s behalf.

Such a change is a real indication of the government’s intention to hold companies to account for corporate misconduct. While this is likely to place a significant burden on compliance teams, the direction of travel seems very clear and organisations would be ill advised to watch and wait.

Companies wishing to get ahead of the game should begin by identifying the risks of economic crime and highlighting any gaps in existing systems and controls. Work can then begin on a programme of mitigation.

GoodCorporation is already talking to corporates about meeting the likely requirements and it will be touched upon during our Business Ethics Debate at the House of Lords later this month.

If this is of interest, do get in touch.

Michael Littlechild

France to impose binding obligation to prevent corruption on corporates under new bribery laws

under-the-hammer

France has passed tough new anti-bribery laws following a major review of existing legislation by Finance Minister Michel Sapin.

Known as Sapin II, the new law is likely to have far-reaching consequences for French companies and foreign groups operating in France or in French territories.

In terms of offences, the major change is the extension of the offence of peddling influence to include officials of international organisations as well as French public officials.

However, the most significant change is the obligation on corporates to implement anti-corruption compliance programmes and operate whistleblowing systems.

The hand of prosecutors will also be strengthened through a new anti-corruption agency tasked with detecting and preventing corruption and the extension of french authorities’ powers to prosecute and sanction acts of corruption committed outside France.

A number of compliance requirements have been specified including anti-corruption codes of conduct, risk assessments, anti-bribery accounting controls and third party due diligence.

This could well prove burdensome for corporates, particularly with the short-six month lead time between the passing of the bill and the legislation coming into effect.

Many of the issues that businesses will face were discussed at our Business Ethics Debate in Paris last month.

More details of the requirements of Sapin II are available on our website. A summary of the debate discussion can be found here.

 

In Brief...

Chatham House: Responsible Business Summit

Incentives, imperatives, implementation: The British Academy November 21

Public interest in responsible business conduct has increased significantly in recent years.

Having worked with over 150 organisations to help them test and strengthen their responsible management practices, GoodCorporation is delighted to be chairing the discussion on Business Transparency.

Led by Leo Martin, the session will explore how transparency has become a fundamental expectation of businesses, examining public expectations, consumer trust and regulatory frameworks.

Confirmed speakers include:

Margot James MP; Matthias Machnig, State Secretary, Federal Ministry for Economic Affairs and Energy, Germany; Robert Barrington, Executive Director Transparency International UK.

Click here to register now.

House of Lords Debate: If ethical culture is so important why is measuring it such a challenge?

Our first debate of the Autumn looked at the difficulties of measuring ethical culture.

Despite the UK’s biggest institutional investors calling for corporates to stop quarterly reporting now that it is no longer mandatory, it seems that big businesses are reluctant to kick the habit.

For obvious reasons, shareholders need evidence that money invested will generate returns. And while quarterly reporting was designed to improve transparency between companies and investors, rather than prevent corporate failure it led to short-term decision making which over time could drive businesses down or lead to poor decision making that resulted in major scandals.

Mark Goyder, founder and chief executive of Tomorrow’s Company and a long time exponent of the need for strong corporate purpose and ethical culture introduced the discussion.

While few disputed the importance of ethics and culture, few were engaging in regular measurement and a number of challenges were discussed.

The discussion summary is on the Business Ethics Debate section of our website.

GoodCorporation’s approach to measuring ethical culture is outlined on the goodblog.

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Newsletters July 22, 2016

Update Summer 16

The post-Brexit landscape for ethics and compliance

Britain’s decision to leave the EU sent shock waves around the globe. Markets reacted badly to the news in the short term, but until the terms are negotiated, it won’t be clear what exactly this means for UK companies.

From an ethics perspective, it should be business as usual. In or out of the EU, it matters how you conduct your business. Indeed much of the negative sentiment behind the Leave vote would indicate that businesses have an important post-Brexit role in re-shaping Britain. The first statement from the UK’s new Prime Minister has called for more responsible business practices, urging companies to do their bit to build a more equal society.
From the compliance angle, these will be interesting times as we wait to see what legislative changes may be made if the UK ceases to be bound by EU rules.

However, the UK must take care not to overload businesses by changing legislation just to move away from so-called red tape. Some legislation will apply to companies whatever our trading arrangements, so care must be taken to avoid binding organisations to two sets of rules. The recently passed General Data Protection Regulation (GDPR) is a case in point.

The UK would be wise to accept the GDPR into UK law knowing that this will give corporates one set of rules to follow while also meeting EU requirements for the adequate protection of cross-border data transfers.

These could be challenging times for compliance teams, but from what we have seen, companies that embed a robust code of conduct which sets out clear expectations of behaviour, are less likely to find themselves infringing the rules.

Embedding ethical conduct into day-to-day business practices may never have been so important.

Michael Littlechild

GoodCorporation risk assessment workshops help with Modern Slavery Act statements

Human Rights-MSA small

According to the 2016 Global Slavery Index an estimated 45.8 million people are currently enslaved in the world. While slavery is illegal in almost every country, the UK’s Modern Slavery Act (MSA) is one of the few pieces of legislation that holds businesses to account for the occurrence of slavery within their supply chain.

To meet the requirements of the MSA, businesses covered by the legislation are expected to prepare an annual Modern Slavery Statement (MSS) to demonstrate the effectiveness of measures taken to prevent slavery, showing improvement over time.

Understanding the risks is clearly the first step in getting this right and a summary of the results should be included in any report.

GoodCorporation is increasingly working with businesses to help them identify the risks of modern slavery and other human rights abuses to which their businesses could be vulnerable.

Our modern slavery and human rights workshops enable the relevant members of the management team to undertake an in-depth evaluation of these risks.

A workshop approach ensures engagement with and ownership of the issue, leading to the development of a clear risk matrix supported by appropriate and robust mitigation strategies. The output from the sessions should inform the development or review of existing policies and can also be incorporated into the MSS.

For full details of this service click here.

In Brief...

GoodCorporation appointed by the BBC

Following the publication of the Dame Janet Smith Report in February, GoodCorporation has been asked to conduct an independent audit of the BBC’s policies and systems for child protection; whistleblowing; investigations; bullying & harassment and managing complaints, to ensure they are fit for purpose.

This work follows on from our review of the BBC’s child protection and whistleblowing policies submitted to the Dame Janet Smith Review in 2015.

Protecting personal data: how can businesses ensure they have adequate procedures?

The digitisation of our personal information has made data vulnerable as Nationwide, TalkTalk, T-Mobile and even HMRC have all discovered in the last ten years.

Our Summer Business Ethics Debate was led by Jonathan Bamford, Head of Strategic Liaison at the Information Commissioner’s Office who argued that robust data protection is essential for a thriving digital economy.

Businesses were asked to discuss what adequate data protection looked like and if they felt their current systems would meet the new requirements which many will be bound by, irrespective of our future arrangements with the EU.

To read a summary of the debate click here

Under investigation?

Tough anti-bribery legislation, increased resources for prosecutors and robust policy statements from both sides of the Atlantic show that tackling corruption is still high on the agenda.

Exposure for corruption is a major risk for corporates and more businesses are finding themselves under the regulator’s spotlight or that of their own audit and compliance teams.

GoodCorporation offers a range of services that can help businesses manage both internal and external investigations.

We can provide forensic analysis, defence case support and manage internal eDiscovery. We offer anti-corruption expertise, impartial advice and are able to assist with any regulatory enquiries.

For full details of our work in this area, click here.

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