Anti-Bribery Compliance: a Solid Foundation

It’s difficult to miss the growing number of news reports describing bribery scandals.   Companies admit to violations of anti-bribery laws they have uncovered themselves or announce investigations started by the Department of Justice or Securities and Exchange Commission.  Dozens of companies in the pharmaceutical and medical device field are currently under investigation.  Millions of dollars have already been paid in fines but, even before any fine is paid, share prices can plummet and reputations suffer.

Much of the damage is avoidable.  Compliance is ultimately less costly than corruption and the basics can be implemented with a modest investment if there’s sufficient management support.

Management Message

From the most senior executive to the farthest flung international employee, the message of compliance should be consistent and clear:  the company will not tolerate bribery and will walk away from an opportunity rather than make inappropriate payments of any kind.  A low-cost, high-impact company-wide email can be sent by senior management at intervals reminding employees of the policy, linking to the on-line version and directing employees to the appropriate internal resource if they have questions.

Provide clear written policies in all appropriate languages

The compliance team should ensure that the company has clear, practical policies. These should be posted electronically and available in the languages of all major markets in which the company operates.  Programs that are available electronically are less expensive, more environmentally friendly and easier to update than hard copies.  Translations can often be undertaken by employees in the relevant countries who bring to the task not only a commitment to the company, but also an understanding of industry jargon.  Here again, the policy should direct employees in search of specific advice to the appropriate legal or compliance office.   Procedures for obtaining authorization for expenditures, reimbursement of expenses, approval of gifts and hospitality, and for recording these requests and expenditures accurately in the company’s books, should also be clearly set forth. If the company has a confidential or anonymous internal mechanism for reporting concerns about illegal payments, this should be highlighted as well.


In-person training has an important role in any robust anti-bribery training program.  The interaction available in a face to face encounter is invaluable.  But employees of multinational companies are spread across dozens of countries and budgets often won’t extend to an annual world training tour.  Prioritize the key audiences for live training and then use less expensive tools to reach the others.   This can include webcasts and video taped versions of the live training provided previously.   The latter can be particularly effective if followed by an opportunity for questions, ideally with a representative of the compliance or legal department who might call in for that purpose.   Unlike online training, the group setting of webcasts and video training sessions enables employees to ask their own questions, as well as to hear those of other employees.  This fosters a sense of community, ensures that questions are addressed in a uniform manner and helps educate the trainer on the nature of the corruption risks in that market.

Due Diligence

Almost all pharmaceutical companies work through third parties at some stage in their sales cycles.  These third party intermediaries can be a valuable extension of a company’s in-country team.   They may include sales representatives, freight forwarders, specialty transportation companies, construction managers for new clinical facilities … the list is long. Most third parties are reliable, committed business partners, but some see their role as that of “fixer” for all local obstacles, without regard to legal niceties.   A majority of anti-bribery enforcement actions to-date has involved a commercial intermediary.  Because third parties are often critical to both the success and the reputation of the business, undertaking reasonable due diligence on them should be a priority.

There are a number of ways to reduce the costs of due diligence.  Prioritize from most to least risky relationships and invest in the process accordingly.   For the lowest risk category, a brief questionnaire, search of the international watch lists and basic compliance questions should be sufficient. For the mid-level category, business references and media searches can be added.  For the highest risk category,    in-person interviews and site visits are typical.  Intermediaries will engage more quickly and resist the process less if care is taken to explain the process.   Ensure that understand that the due diligence is applied consistently within categories of third parties and that they are not being targeted.  Extending on-line training to commercial intermediaries can also help them to understand the benefits of compliance and the risks to all of non-compliance.

When Things Go Wrong

And finally, just as it is important to send a management message emphasizing appropriate marketing tactics, it sends a powerful message to publicize employee violations of corporate policy whenever feasible. Details of the offense, sanitized of identifying information, can be posted, together with the sanction: loss of bonus, demotion, termination, etc. Employees will take anti-bribery compliance seriously if they believe that management takes it seriously.