Study Finds Most Companies Adjusting Contracts Due to Compliance and Integrity-related Issues

Concerns about foreign corporate corruption, bribery and other compliance and integrity-related issues are causing businesses to re-think or even terminate deals with potential (and existing) business partners.

Mitigating risks like these has become a top priority, and new results from Deloitte's annual Look Before You Leap survey show that:

Almost two-thirds (63 percent) of those participating in the study can identify Foreign Corrupt Practices Act (FCPA) and anti-corruption issues that led to an aborted deal or a renegotiation over the past three years.


A clear majority (60 percent) have either pulled out of a transaction or adjusted deal pricing to reflect compliance and integrity-related issues.


China is highest on the list of countries or regions ranked according to concerns about the potential for compliance and integrity-related issues when doing business. More than 80 percent of respondents said they were significantly or somewhat concerned about China.


Entities from Mexico appear to be very finely attuned to compliance and integrity due diligence issues. They are also highly confident in their ability to meet the challenges.

Of course, in today's social media-driven world, news of a compliance or integrity-related misstep can spread fast and that means companies are becoming much more mindful of reputation risk.

"Respondents placed a great deal of importance on the strength of the integrity and reputation of potential business partners or acquisition targets, as well as the ramifications for their own organizations," Wendy Schmidt, leader of Deloitte's business intelligence services practice, said in a statement. "In today's environment where word travels quickly, maintaining one's reputation, and engaging in business deals with upstanding organizations, is of utmost importance."