Last month, anti-corruption watchdog Transparency International released its first-ever corruption and integrity risks report. Titled “EU Integrity System (EUIS) Report” the report focused specifically on E.U. institutions, which include European Parliament, European Council, Council of the EU and the European Commission—the governing bodies of the E.U.
Strong Framework Undermined by Poor Practices
The EUIS report found that there is a solid foundation of policies and rules to support ethics and integrity in place at E.U. institutions. However, it found several factors undermining the institutions’ ability to ward off corruption, including “poor practice, lack of political leadership, failure to allocate sufficient staff and funding, and unclarity about to whom the rules apply.”
The report goes on to conclude that, “…despite improvements to the overall framework, corruption risks persist at the E.U. level.The most urgent of these include opacity in E.U. law-making and in E.U. lobbying, poorly managed conflicts of interest, weak protection for E.U. whistle-blowers, and weak sanctions for corrupt companies.”
The report makes a number of recommendations for E.U. institutions to strengthen their ethics and compliance programmes, with a focus on protection for E.U. whistleblowers, and managing conflicts of interest. Many of these recommendations also apply to any E.U. companies battling corruption in their own organisations:
- Optimise and Standardise Global Conflict of Interest Policies: Bring conflict of interest policies up to international standards, and make sure they are consistent and clear. This reinforces the importance of making sure all policies—especially those around high-risk areas like bribery and corruption—are up-to-date, and that employees acknowledge and understand them. Many organisations use a policy management software solution for easy policy authoring, review, approval, distribution and attestation.
- Establish Independent Ethics Bodies Introducing an independent ethics body to advise and monitor institutional conduct helps to clearly designate compliance ownership and oversight. We recommend a designated compliance owner internally as well as a compliance committee to advise and assist with anti-corruption compliance programmes. The work of the committee is to develop a system to solicit and respond to problems proactively before little problems turn into major issues.
- Improve Internal Whistleblowing Procedures: Developing whistleblower procedures and protections is crucial in creating an ethical culture. Fear of retaliation is one of the top reasons stakeholders do not report misconduct. Confidentiality and non-retaliation policies should be created and shared with employees to encourage reporting of all issues, including bribery and corruption. Reported concerns—whether via anonymous hotline (where appropriate), web portal or manager open-door reports—should all be added to a centralised database. A good incident management system can be an important tool in detecting and correcting problems.
Applying the Recommendations to Your Organisation
The EUIS report points out that, “the stakes of ignoring weaknesses in anti-corruption safeguards are high,” which is true not just of the E.U. institutions but of all organisations. Corporations all over the world face a myriad of overlapping anti-bribery and corruption standards, many of which have different interpretations on what is an offense, who is liable, penalties and prescribed defences.
The good news is that, increasingly, national laws and global standards are converging on one common defence for organisations: a robust and effective compliance programme.
For more insights on creating a culture of compliance, download NAVEX Global’s free Bribery & Anti-Corruption Compliance in the UK & Europe eBook.