FCPA Compliance and Ethics Blog

April 20, 2012

Monty Python, the Holy Grail & Principle II of Adequate Procedures-Top Level Commitment

We conclude our UK theme this week by attempting to answer a question that has long concerned me. Why was it that the Knights of the Roundtable were searching for the Holy Grail? I mean, what would a chalice, first used in the Last Supper and then used to drain the blood of Jesus after crucifixion, being doing in Britain? The story is a bit convoluted but this is what I have learned this week; that is it is a part of the legend of King Arthur and it goes something like this.

Joseph of Arimathea, the man who brought down the body of Jesus from the cross after he was crucified, later brought the Holy Grail to Britain with him when he became the first Christian Bishop of Britain. It was hidden and could only be found by a righteous Knight, who turned out to be Sir Perceval. What I did not know was the Sir Perceval was actually the son of Sir Lancelot from a witch, who came to Sir Lancelot in the form of Lady Guinevere, who, nine months later, gave birth to a boy who later became the Knight Sir Perceval.

As I said, all quite confusing as there are apparently variations upon variations of this myth. I think I will just stick with the Monty Python and the Holy Grail version. At least we know how to answer the three questions to safely cross the Bridge of Death: (1) What is your name? (fill in the blank); (2) What is your quest? (I seek the Holy Grail.); and (3) What is the air-speed velocity of an unladen swallow? (see below)

All of this brings me to the UK Bribery Act and the Six Principles of an Adequate Procedures compliance program and today’s topic, Principle II – Top-level Commitment. The purpose of Principle II is to encourage the involvement of top-level management in the determination of bribery prevention procedures. Under Principle II the top-level management of a business; whether a board of directors, the owners or any other equivalent body or person, must be committed to preventing bribery by persons associated with it. This top-level of management should foster a culture within the company in which bribery is never acceptable. The UK Ministry of Justice (MOJ) Guidance comments that those persons who are at the top of a business “are in the best position to foster a culture of integrity where bribery is unacceptable.” The Guidance provides that top-level management commitment to bribery prevention is likely to include (1) communication of a company’s anti-bribery stance, and (2) an appropriate degree of top-level involvement in developing bribery prevention procedures.

I.                   Internal and external communication of the commitment to zero tolerance of bribery

The Guidance lists several steps that a company can take to establish this tone of top-level commitment to zero tolerance of bribery. There could be a formal written statement communicating this commitment to establish an anti-bribery culture within an organization. The Guidance recognizes that there could be several forms of communication, which might be tailored to different audiences within the company and could be generally available, for example on a company’s intranet and internet site. This commitment should be emphasized so as to draw employees’ attention on a periodic basis to this commitment.

The Guidance provides some touchstones regarding the types of concepts that a formal statement should include to demonstrate that the top-level commitment is viewed as effective:

  • A commitment to carry out business fairly, honestly and openly, with transparency;
  • A commitment to zero tolerance towards bribery and corruption;
  • The negative consequences of breaching the policy for employees and managers;
  • to those business partners the company might engage, explaining the consequences of breaching contractual provisions relating to anti-bribery and anti-corruption prevention;
  • A statement of the positive benefits for both the company and its employees of the business benefits of rejecting bribery. This would include the reputation of the company with customers and the confidence of its business partners and the incentives for employees to do business in such a compliant manner;
  • There should be a reference to the range of anti-bribery prevention procedures the company has or is putting in place, including any protection and procedures for confidential reporting of bribery such as anonymous reporting through a helpline or hotline;
  • A clear communication that key company individuals and departments are involved in the development and implementation of the company’s anti-bribery and anti-corruption prevention procedures; and
  • Reference to the company’s public facing involvement in any collective action against bribery and corruption in its same business sector.

II.                Top-level involvement in bribery prevention

The Guidance intones that effective leadership in bribery prevention will take a variety of forms appropriate for and proportionate to a company’s “size, management structure and circumstances.” In smaller companies this could mean that top-level managers be personally involved in initiating, developing and implementing anti-bribery and anti-corruption prevention procedures and critical decision making. Conversely, in a large multi-national, the Board of Directors should be responsible for setting bribery prevention policies, tasking management to design, operate and monitor bribery prevention procedures, and keeping these policies and procedures under regular review. The Guidance sets forth several elements which it believes are symptomatic of top-level engagement in a company’s anti-bribery and anti-corruption compliance effort. They include:

  •  There should be top-level involvement in the selection and training of senior managers to lead anti-bribery work where appropriate;
  • Top-level leadership on key measures such as a code of conduct;
  • There should be top-level endorsement of all bribery prevention related publications;
  • Top-level management should lead the company in awareness raising and encouraging transparent dialogue to ensure effective dissemination of anti-bribery and anti-corruption policies and procedures to employees;
  • Top-level management should be engaged or involved in oversight of appropriate third party business partners;
  • Top management should demonstrate leadership through relevant external bodies, such as industry trade groups or other similar organizations and the media, to help articulate both the company’s overall compliance efforts and industry commitment in the fight against bribery and corruption;
  • There should be specific top-level involvement in high profile and critical decision making where appropriate;
  • Top-level management must assure that not only an appropriate risk assessment is conducted but that it informs the company’s anti-bribery and anti-corruption compliance program and not the other way around; and
  • Top-level management should have general oversight of breaches of procedures and the provision of feedback to the company’s Board of Directors or equivalent, where appropriate, on levels of compliance.

The MOJ Guidance once again provides solid detail on the elements which should go into your anti-bribery and anti-corruption compliance program. It also provides the basis for several different metrics that you can set up to measure how well top-level management is involved and engaged in your compliance regime.

As to the answer to the final question from Monty Python, it depends, “What do you mean? An African or European swallow? To see a clip of the three questions, click here.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

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