Despite growing awareness and appreciation of the risks of non-compliance, only about one in four companies feel ready to meet the requirements of the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA), according to new survey results from Kroll Business Intelligence and Investigations.
The study, which polled more than 1,200 senior executives from a broad range of industries worldwide, found that:
Just 27 percent of survey respondents said they are well-prepared to comply with FCPA and UKBA.
Of those companies subject to these two laws, just 43 percent have trained senior management, agents, vendors and foreign employees to be compliant with one of these laws. Even less (39 percent) have assessed the risks arising from them.
More than one-third (37 percent) believe their due diligence provides a sufficient understanding of a potential partner's of investment target's compliance with these acts.
Clearly, companies need to step up their game. Not only are the risks of non-compliance quite serious (and getting more so), but fraud is on the rise. Knoll's new research also showed that:
Internal fraud is increasing. 60 percent of all fraud cases are committed by insiders that's up from 55 percent last year. Among companies impacted by fraud, the most likely perpetrators were junior employees (28 percent), followed by senior management (21 percent) and intermediaries or agents for the company (11 percent).
Nearly half (47 percent) of the executives surveyed consider their companies moderately to highly vulnerable to corruption and bribery. It is the leading risk causing companies to avoid investing in new regions or countries.
Information theft, loss or attack is a major concern. Reports of actual information theft, loss or attack declined from 27 percent to 23 percent. But even so, half of those surveyed believe they are moderately to highly vulnerable to information theft. Only 38 percent thought so last year.
Half of the executives surveyed said they are concerned about information theft.
An executive summary of the 2011/2012 Kroll Global Fraud Report Survey, which contains many more details including a breakdown of results by region and a discussion of specific industry challenges is available here.