MARIMFraud & Corruption Risk

Management: Innovate Within Boundaries

Dr Mark LovattCEO, Trident Integrity Solutions Sdn Bhd

www.trident-integrity.com

Since 2011 we have worked with….

Visit our website for more information

Question:

how does the task of

'creating value'

for an organisation work?

How is value CREATED?

The old way of thinking

How is value built today?

How is value built today?

80% of these company's value is non-tangible

• Brand / good will

• Intellectual property

• Human capital

• Culture

As risk managers, how do you deal with that?

What happens when things go wrong for a non-tangible-asset-based company?

Facebook in trouble for data breach

How is non-tangible value destroyed?

We're talking about:

• Brand / good will

• Intellectual property

• Human capital

• Culture

By damage to

REPUTATION

What factor is a

primary risk

to reputation?

Top 10 US FCPA prosecutions of companies for bribery

Odebrecht/Braskem (Brazil, 2017): $2.6 bn (total)

Siemens (Germany, 2008): $1.6 bn (total)

Telia Company AB (Sweden, 2017): $965 million

Société Générale (France, 2018) $860 millions

VimpelCom (Holland, 2016): $795 million (total)

Alstom (France, 2014): $772 million

KBR/Halliburton (USA, 2009): $579 million

Teva Pharma (Israel, 2016): $519 million

Keppel Offshore (Singapore, 2017): $422 million

Och-Ziff (USA, 2016): $412 million

The UK Bribery Act: prosecutions underway

MACC Amendment: Corporate Liability

France also recently strengthened its laws

• Sapin II came into effect 1 June 2017

Australia is next…

Your reputation is essential for your business

2015 Dow Jones Anti-corruption Survey*

• Survey conducted among more than 250 compliance

professionals and companies worldwide

• 76% said that reputational issues would cause a

review of their business partners

• 68% said that they delayed / stopped working with a

business partner because of concerns about

violations of anti-corruption regulations

*2015 Anti-Corruption Survey Results, Risk & Compliance, Dow Jones

Harapan are already hard at work on this

In today’s world, the Internet knows everything. And it never forgets.

Is value creation enough?

Value created but not protected is like a leaking bucket

How is a sustainable business created?

Value Creation

Value Protection

How is value PROTECTED?

Value is protected by GOVERNANCE

• Risk assessment

• Policies, procedures and guidelines

• Internal monitoring and enforcement (IA, Investigations, DIs etc.)

• Committees / Board of Directors

• Statutory Bodies & Regulators

• Enforcement bodies

Question:

How many of you currently have

Bribery & Corruption risk

on your risk register?

Bribery risk assessment

• The assessment needs to cover the main bribery risk areas:

– Procurement, Finance, Legal,

– Agents / business associates

– Specific projects & large transactions

– Company strategy

– High-risk positions (procurement, sales)

– HR procedures: appointment, incentives/bonus schemes and promotion

If Bribery & Corruption risk is recorded, what can you do to

protect the value of your company?

"Innovation within Boundaries"

The new international standard: ISO 37001

• To provide assurance for companies that their anti-bribery system comprises ‘adequate procedures’ regarding bribery & corruption

• To provide an international certification for anticorruption systems

• Published 15 Oct 2016

ISO 37001:2016 structure

ISO 37001 Project Plan

ISO 37001:2016 ABMS

Measures and controls to help prevent, detect and respond to bribery, among them:

• Anti-bribery policies and procedures, including:

• Gifts and hospitality,

• Charitable donations & sponsorships

• Facilitation payments

• Top management leadership, commitment and responsibilities

• Whistleblowing: policy & process design

• Conflict of interest management procedures

• Due diligence for risk areas (staff & companies)

• Communication and training

• Monitoring, reporting & investigation

Overall, what will the ABMS deliver?

TRAINING, AWARENESS & COMMUNICATION

General staff trainingHot job staff training

Onboarding Internal communicationSupplier communication

Refresher trainingOngoing communication

ENFORCEMENT, MONITORING & IMPROVEMENT

AuditingInvestigations

Management reviewNon-conformity & corrective action

System performanceOngoing risk assessmentContinual improvement

TRUST

COSTS REDUCED

RISK REDUCED

STAFF CONFIDENCEINVESTOR CONFIDENCE

PARTNER APPROVAL

REPUTATION PROTECTED

POSITIVE MEDIA

SHAREHOLDER ASSURANCE

INTEGRITY CULTURE

CORPORATE VALUE: INTEGRITY

POLICIES & PROCEDURES

Gifts & HospitalityWhistleblowing

Conflict of interestDue diligence

Staff screeningProcurement Process

Financial Process Investigation process

Looking further ahead

Where can innovation be applied?

• Smart phone apps

– Gamification

– Information access

– Reporting

• Online tools / service providers

– Due diligence, HR services

On its way…

Dr Mark Lovattmark.lovatt@trident-integrity.com

www.trident-integrity.com+6 013 297 4450

THANK YOU