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Advantages: ISO Anti-Bribery Management System Certification
Date: 02 Feb 2018 By:CRI Group

Bribery is a key issue in both local markets and global business activities. The desire to expand business operations and maximize commercial profits not only requires identification and management of operational risks but also identification and mitigation of bribery risks. It is important to note that expansion of business tends to involve bureaucratic processes thus exposing an organization to bribery risks in a bid to either fasten bureaucratic processes or even in lobbying for favorable operating business climate. Of note, bribes need not be monetary and may be in kind often in the form of favors such as trips, meals among other inducements that may influence favorable decisions. In fact, the global legislation on corruption recognizes trading in influence as a form of corruption (Norton Rose Fulbright, 2017). While strategic management is geared towards the maximization of profits, it is important for organizations to involve themselves in ethical and transparent dealings. Often, management and business personnel participate in corruption and bribery activities in order to facilitate their entry and continued presence in the market. This essay places great emphasis on benefits of ISO 37001:2016 anti-bribery management system certification by characteristically portraying companies and organizations as entities that have an obligation to internally comply with the international anti-bribery standards in order to promote their brand and obey laws thus strategically increasing their competitiveness and overall profitability. Therefore, this article discusses and synthesizes existing literature on ISO 37001:2016 anti-bribery management system certification to argue that the ISO anti-bribery management system certification is beneficial to businesses.

In particular, the essay reviews four broad benefits of anti-bribery management. First, the article postulates that adoption and compliance with the ISO 37001 anti-bribery management system certification allows an organization to engage in ethical business conduct by implementing a viable anti-bribery management program. The ISO anti-bribery management system acts as an instructive and exhaustive guide in the identification of bribery risks and formulation of viable bribery risk management practices (Center for Responsible Enterprise And Trade, 2014). Secondly, the article reviews the extent to which the anti-bribery management system enhances confidence among the management, employees, among other stakeholders that an organization actively pursuing internationally recognized and accepted processes to prevent bribery and corruption. Third, the article proceeds to discuss the accruing benefit associated with protection of an organization’s assets and the interests of various stakeholders from the effects of corruption. If found culpable, the management may be subject to imprisonment while the organization may receive sanctions of fines or orders of winding up. As such, it is highly desirable to avoid bribery and corruption. Lastly, the due diligence and internal investigation procedures recommended by the ISO 37001 anti-bribery management system allows an organization to adduce evidence to show that it has taken reasonable steps to prevent bribery and corruption.

Implementing a viable anti-bribery management program utilizing widely accepted controls and systems

The ISO anti-bribery management system is a cornerstone of a strategic approach to bribery risk identification and subsequent mitigation of bribery risks. For instance, knowledge of a risk is a necessary factor for the effective management process of such risks. Additionally, using the tested principles and practices of the ISO anti-bribery management system allows an organization to tailor the recommendations in the ISO anti-bribery management system to its contextual business environment. Therefore, it is necessary to discuss how the viability of the anti-bribery management program is of benefit to an organization.

One key feature of the ISO 37001: 2016 anti-bribery management program is the integration of best practices in whistle-blowing procedures (Valerio, 2017). Usually, employees are the first people who are aware of bribery and corruption practices within an organization. By integrating whistle-blowing protection in its internal anti-bribery practices, an organization implements a viable anti-bribery management program that encourages employees to come forward with knowledge on ongoing corruption (Gordon & Miyake, 2001). It is important to note that information obtained through whistle-blowing is not always factual thus the need to conduct due diligence and verification.

Notably , the ISO 37001:2006 has had the impact of making companies adhere to the International Anti-Bribery Management System Standard. As an international standard of high repute, ISO 37001 has brought tremendous changes to market dealings and firm operations. Organizations have a guideline of rules and code of ethics to follow to mitigate the risk of being involved in corruption charges. Terms of engagement when dealing have been laid down and each organization and other market players know what is legal and acceptable. Furthermore, the ISO 3700 contains pre-existing policies and guidelines which are familiar to some organizations. It only added a few regulations to existing policies. These include: reporting, monitoring and correction measures targeting the offenders (Cottrell, 2016). This has made it easier for the organizations to comply with them as they have been engaging them in the past. Companies have to comply with the new regulations before engaging in any kind of business. Fighting corruption in organizations and in business transactions has been made easier and achievable. Specifically tailored rules of engagement for different organizations ensure that they are able to stop or even prevent cases of bribery when or before they occur.

Stakeholder assurance that the organization is actively pursuing internationally recognized and accepted processes to prevent bribery and corruption

The international nature of the ISO anti-bribery management system allows organizations to align their internal policies on corruption with the domestic laws of the country the organization is operating in. It is important to note that state-nations are increasingly domesticating the global legal framework on anti-corruption and actively prosecuting offenders. Therefore, the international ISO anti-bribery management system is of high importance to a company as it formulates its internal policies on anti-bribery and anti-corruption in accordance with international and domestic legislation on anti-corruption in both the public and private sector.  

The assurance that an organization is operating within international standards and processes helps cultivate social legitimacy in the operation of a company which directly serves to boost investor confidence and attract investors. Also, some consumers base their purchase decisions on the ethical operations of accompany. As such, ISO standard serves as a pull factor for new consumers. Bribery is a very serious issue with adverse macroeconomic and microeconomic effects (Valerio, 2017). In particular, it not only distorts markets and competition but also erodes the profitability of private firms and individual enterprises throughout an economy. The ISO 37001:2016 anti-bribery management system provides measures that help organizations to prevent, detect, eradicate and address bribery. This is done by adopting the anti-bribery policies, hiring personnel to oversee the anti-bribery compliance risk management and diligence on projects and business associates, implementing commercial and financial controls and also reporting and investigation procedures. ISO 37001:2016 can only be used in any of the organization regardless its size, type whether public or private or non-profit organizations.

The ISO 37001:2016 anti-bribery management system allows organizations to incorporate international standards of preventing bribery in their routine day to day operations. Put differently, it helps the organization to improve performance by orienting the organizational culture towards transparency and eradication of bribery. Such an organizational culture allows the design of goals, objectives and mission that promote due diligence, and monitoring and evaluation in a bid to identify and mitigate bribery risks (Valerio, 2017). Identification and resolution of bribery risks increase an organization’s capacity to deliver consistent and improved satisfactory services to consumers within the law and without engaging in bribery and corruption. In addition, the anti-bribery management system improves the way the organization protects its people from fraud and ensures that there is a favorable working environment. Therefore, the ISO 37001:2016 anti-bribery management system enhances transparency in organizational culture thus promoting the optimization of resources.

Investors are another important entity. When investors are investing in any organization or market such as the stock market, they need to be protected from scrupulous businesses. The system allows them to have genuine business deals that are free from bribery. Since in many markets, for example, the stock market many players like to use shortcuts in the name of bribes as demonstrated by insider trading of stocks and options in the markets. The integration of anti-bribery management system in routine operations allows organizations to use international standards to detect and mitigate probable apparent forms of bribery. Thus, ISO 37001 ensures that there are sanity and fairness in the market.

The ISO 37001:2016 anti-bribery management system also levels the market by eradicating unfair commercial practices of bribery that stand to distort a section of the market to the whole market. Of note, bribery and trading in influence is a common practice among multinational corporations operating in developing nations. Often, bribes affect markets by distorting markets to the extent that the bribing organizations operate outside the law where they flout systems such as tendering and supply chains thus landing lucrative business deals with minimal attention being paid to merit. As such, commitment of businesses to the ISO 37001:2016 anti-bribery management system boosts investor confidence thus facilitating investment and healthy competition. It is important to note that bribery can also be used in recruitment. By embedding ISO 37001:2016 anti-bribery management system in its recruitment practices, an organization benefits by hiring the best-fit talent. As such, the organization boasts of job and talent match which is necessary for employee confidence and job satisfaction which translates to increased employee productivity.

 

Protection of the organization, its assets, shareholders, and directors from the effects of corruption

Protection of the organization’s assets, shareholders and management from the adverse effects of bribery and corruption is another benefit associated with the ISO anti-bribery management system. Often, the negative effects of corruption are economic in nature. For instance, bribery affects the profit margins of a company to the extent that the management has to divert funds meant for either operating capital or assets capital to facilitating bribes. Additionally, the public knowledge that an organization is actively involved in bribery or any other form of peddling influence affects brand identity which erodes consumer base thus reducing the overall profitability of an organization.

Bribery is one of the world’s most destructive habits. Responsible for the loss of an annual monetary figure of $1 Trillion, this vice has demoralized institutions and nations as well. In the appreciation of the catastrophic effects of this vice, ISO designed a system capable of sealing loopholes against bribery in organizational systems. Specifically, the ISO 37001:2016 creates precise measures that assist in detection, prevention and the address of bribery occurrences in institutions (Center for Responsible Enterprise And Trade (CREATe), 2016). This ISO process focuses on two bribery angles. One, it addresses how a bribery by the organization can occur. Here, the certification demands to identify either the business or the associates who have handled a bribe deemed to benefit the organization. Two, it addresses cases where the organization has received a bribe. In this scenario, it is the reality where a business or its associates has received or given a bribe in relation to the activities conducted by the entity.

This system can operate as a stand-alone facility or function under another system through integration. The tool is available for use by all organizations regardless of purpose or objectives. Therefore, commercial organizations, not-for-profit entities and governments are free to apply it as a way of achieving anti-bribery compliance. One advantage that cuts across all organizations is the amplification of confidence in the eyes of external stakeholders. From another perspective, an organization using this ISO format is assured of a good reputation as well as an excellent working environment. The risk factors are minimized and a solid credential pathway is realized. Indeed, many for-profit outfits have consistently applied anti-bribery systems as a measure of acquiring extensive market penetration goals. The ISO 37001 typically seeks to create an accountability culture around the globe that can have organizations conduct activities in a clean and health environment. For the business world, ISO 37001 is packaged to breed a set-up full of trust in a way that can sustain and grow commercial activities. Simply, it is a system that seeks to make the world an honest place.

An organization with an ISO: 37001 2016 certification is open to public scrutiny since its management operates without fear. Further, such an entity displays fidelity and compliance to bribery legislations such as acts of parliament or the congress. More importantly, subscribing to the system certification demonstrates a commitment to collaborate and work with like-minded organizations in managing bribery and corruption in the world. The chain of responsibility and accountability, additionally, ensures that the supply chain systems used by the organizations conduct clean and verifiable business. Closely related to that advantage is the growth of moral and legal business transactions between businesses and their contractors. Corruption can permeate to every corner of an organization and the anti-bribery certification blocks such realities.

The ultimate beneficiary of ISO: 37001 is the shareholder. When an organization bribes its way into the business and has its license taken away, the shareholder loses their investment. If credibility is lost and the activity schedule goes down, it is the shareholder who bears the heaviest burden. However, bribery in organizations practically affects everyone in the political, commercial or social jurisdiction of such a company. Disgrace can lead to loss of jobs. Still, a fined or closed company implies lower tax revenues to the government. Therefore, businesses should integrate ISO: 37001 2016 in their management operations as well as in risk and compliance.

Provision of acceptable evidence to prosecutors or courts that the organization has taken reasonable steps to prevent bribery and corruption

The ISO certification embeds a culture of corporate social responsibility and willingness to collaborate with law enforcement agencies. Cognizant of the backlash and opprobrium associated with corporate obstruction of justice in the investigation of bribery and corruption, the ISO certification allows organizations to document their proactive involvement in reviewing their compliance with global standards of anti-bribery management as well as the concrete measures the management has initiated to show its willingness to prevent and curb bribery risks.

It is important to note that organizations have a distinct legal personality away from the management and other stakeholders. The separate legal personality of an organization means that an organization is liable for bribery activities committed by its employees or its management. Under domestic laws, culpable organizations are subject to legal sanctions which include hefty pecuniary fines and in some cases dissolution of the organization. Pecuniary fines affect the operations of a company by diverting either operating capital or assets to unintended activities. Overall, diversion of financial resources to foot fines affects the profitability of a company as well. In addition, such diversion of financial resources through fines affects growth strategies such as expansion into new markets. In this case, provision of documented evidence to the prosecution or the courts demonstrates that an organization has taken reasonable measures to prevent bribery and corruption thus helping the organization to avoid fines and sanctions such as winding up.

The management has a huge role in identification of bribery risks in a bid to maximize an organization’s efficiency and productivity. The ISO certification system offers best strategies to manage an organization in the face of bribery and corruption risks. Of note, ISO: 37001 2016 allows organizations to identify risks and formulate key performance indicators to monitor and evaluate the extent to which an organization acts within the law and conducts ethical business. In sum, the ISO: 37001 2016 certification not only facilitates the war against corruption in business environments but also promotes efficiency and productivity of an organization.

Bibliography

  1. Center for Responsible Enterprise And Trade (CREATe). (2016). Top 10 Takeaways of the ISO 37001 Anti-Bribery Management Systems Standard. Center for Responsible Enterprise And Trade (CREATe). Retrieved from https://create.org/wp-content/uploads/2016/09/CREATe-ISO-37001-Guide-eBook-Final-9.27.16.pdf
  2. Center for Responsible Enterprise And Trade. (2014). Addressing corruption risk through enterprise risk management. Center for Responsible Enterprise And Trade. Retrieved from https://create.org/wp-content/uploads/2014/12/create_whitepaper_ac_2014.%C6%92.single_lo.pdf
  3. Cottrell, E. (2016, December 13). ISO 37001- The Potential Impact of the New International Anti-Bribery Management System Standard. Retrieved from http://pcgc.parkerpoe.com/iso-37001-the-potential-ipact-of-the-new-international-anti-bribery-management-system-standard/
  4. Gordon, K., & Miyake, M. (2001). Business approaches to combating bribery: A study of codes of conduct. Journal of Business Ethics, 34(3), 161-173.
  5. Norton Rose Fulbright. (2017, February). Business ethics and anti-corruption world. Norton Rose Fulbright. Retrieved from http://www.nortonrosefulbright.com/files/business-ethics-and-anti-corruption-world-issue-5-146709.pdf
  6. Valerio, B. (2017). Corruption and ISO 37001: A new instrument to prevent it in international entrepreneurship. World Journal of Accounting, Finance and Engineering, 1, 1-14.