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Corporate fraud and corruption continues to blight the business world, costing economies billions every year. From global conglomerates to small and medium-sized enterprises, every company is at risk. There are many tools available to companies to help fight malfeasance, but perhaps the most valuable is robust corporate governance. Responsibility, accountability, awareness, impartiality and transparency should form the backbone of a robust corporate governance framework.

UNITED STATES

J.S. Held

“Over the past several years, there has been greater emphasis by boards and senior executives on taking proactive measures to combat fraud and corruption. This comes in various shapes and sizes but includes more prominent seats at the table for ethics and compliance departments and internal audit groups. Receiving direct feedback from frontline personnel who are focused on fraud and corruption daily is critical in understanding the prevalent issues, how the issues are being tested and ultimately how the company is mitigating risks.”

CANADA

BDO Canada LLP

“Proactive risk management has become a higher priority for many Canadian companies in recent years, particularly with respect to cyber threats. Fraud risk and compliance effectiveness assessments are more commonly found on board agendas. However, in my experience, corporate risk registers tend to underestimate fraud risks. The impact of fraud may be assessed as ‘high’, but the probability of occurrence is assessed as ‘low’. Corporate governors and executives seem to take the view that their organisations are unlikely to encounter fraud.”

COLOMBIA

BDO Colombia

“In recent years, boards and senior executives in Colombia have become more conscious of fraud and corruption risks in their organisations. In our experience, and from what we have observed in the business community, organisations have implemented several proactive measures to safeguard their reputations, ensure regulatory compliance and mitigate financial losses due to fraud. The strategies include supporting documentation review, transaction monitoring, communications overview, detection of anomalies and the use of governance, risk and compliance (GRC) solutions.”

UNITED KINGDOM

Kennedys

“The introduction of the Bribery Act 2010 heralded a significant shift in how boards and corporates approached their business’ compliance policies and procedures. Suddenly, companies’ compliance programmes were thrust into the spotlight and at risk of being severely tested if an associated person bribed an individual for the benefit of the company and the company had no procedures to prevent that conduct from taking place. More than 10 years later, senior executives and boards have made compliance the backbone of their business as regulatory oversight into their business practices has intensified.”

REPUBLIC OF IRELAND

BDO

“In Ireland, company directors are usually appointed by the members to manage the affairs of the company on their behalf. The main legislative provisions concerning company directors are set out under part 4 in sections 128 to 167 and under part 5 in sections 219 to 255 of the Companies Act. The primary responsibility of directors is to ensure compliance with the Companies Act, which includes acting honestly and responsibly and maintaining proper books and records. Directors must sign a statutory declaration each year that the company is in compliance with its obligations.”

GERMANY

Alvarez & Marsal

“Through corporate compliance functions, companies are putting a clear focus on measures to address fraud and corruption risks. This focus is usually accompanied by a tone from the top directed by senior executives who emphasise the importance of compliance and integrity. Taking proactive steps to reduce incidents of fraud and corruption is one of the key aspects of every standard compliance programme. Companies need to continuously monitor their risk exposure, depending on the types of business and geographies in which they operate, and should regularly check and reinforce awareness within the workforce too.”

SWITZERLAND

BDO

“As in other parts of the world, in Switzerland effective leadership starts with good corporate governance, a culture of compliance and suitable control processes. Beginning by setting ‘the tone from the top’, there are clear instructions and training programmes in place for employees, backed by rigorous control processes. There are transparency and authorisation requirements, like the obligation to disclose gifts or non-cash benefits that exceed a certain value. For credit and other financial institutions higher standards apply when it comes to disclosures, power of attorney and other banking services.”

INDIA

BDO India

“Over the last decade, India has witnessed an unprecedented increase in the volume of corporate fraud cases, leading to a greater recognition of the importance of addressing fraud and corruption. While Indian companies are becoming more conscious of these risks, their proactivity in mitigating these incidents varies based on factors such as size, structure, operations and industry. With evolving business dynamics, increasing regulatory enforcement, higher costs of investigation and litigation, and greater reputational risk, boards and senior executives are taking proactive measures to mitigate these fraud and corruption risks.”

PEOPLE’S REPUBLIC OF CHINA

Grant Thornton

“Since China’s post-coronavirus (COVID-19) reopening in December 2022, headquarters-based senior executives have been returning in increased numbers for short visits. Some are on project-related matters, while others just want to reconnect with the China subsidiary on the business climate and see for themselves the changes made since 2019. Being present is important to show support and commitment, which is an approach that can also be applied to fraud prevention strategies. In addition, a recent trend is the increased budget allocation for corporate compliance investigations.”

JAPAN

PwC Risk Advisory LLC (PwC Japan Group)

“Fraud occurs when pressure, opportunity and rationalisation – collectively known as the ‘fraud triangle’ – converge. While companies have historically mitigated fraud by bolstering internal controls to eliminate opportunities, the aspects of pressure and rationalisation have been largely treated as individual ethical concerns. Recent fraud cases have sparked a demand for senior executives to reshape organisational culture to deter fraud. Leadership actions significantly impact creating an ethical workplace, with leaders exemplifying anti-fraud commitment influencing company ethos.”

CONTRIBUTORS

Alvarez & Marsal

BDO

BDO Canada LLP

BDO India

Grant Thornton

J.S. Held

Kennedys

PwC Risk Advisory LLC (PwC Japan Group