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Airmic 2012

Risk managers at AIRMIC vote for Bribery Act as biggest cause for concern

Miller invited visitors to their AIRMIC stand to vote for the piece of legislation and the D&O exposure that causes them most concern by placing coloured balls in see-through tubes (see photo - left). Just over half the voters (52%) selected the Bribery Act as the piece of regulation that concerns them most, while only 27% were anxious about the Corporate Manslaughter Act. The threat of regulatory investigations worried 49% of attendees – almost twice as many as were concerned about the breach of fiduciary duties.

Richard Watts, a D&O specialist at Miller, who hosted a workshop on the Bribery Act, comments; “These findings completely reinforce what we hear from clients and prospects – directors and officers are very concerned about the Bribery Act, especially since the burden is being placed on boards to prove that no wrongdoing has occurred. The companies with a spread of international operations tend to be more concerned about the reach of the US authorities through the Foreign and Corrupt Practices Act.

“The key challenge is having adequate procedures in place. Companies need to ensure that their employees are aware of and fully understand the rules, the procedures and, most importantly, what constitutes a bribe. This lack of awareness is what causes problems since the definition of a bribe is not always clear – especially around corporate hospitality.

“The Serious Fraud Office (SFO) is determined to enforce the Act – despite the absence of a major prosecution to date. In April the new Director of the SFO, David Green, made some uncompromising statements concerning its position on targeting “top end bribery and corruption”. In addition, the FSA has issued a considerable amount of guidance about required anti-bribery/crime systems and controls.

“No organisation can afford to be complacent and businesses are right to be worried about regulatory investigations. As an example of the increased regulatory oversight, the Serious Fraud Office prosecuted 100 cases in 2011, up from 50 in 2006.”