The UK Bribery Act came into force on 1 July 2011. The coalition government has said that it wants the UK to take a leading role in the global fight against bribery and business corruption. Bribery is defined by the Ministry of Justice (MOJ) as "giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so."
The Act applies to all incorporated bodies in the UK, but not all foreign companies who are listed on the London Stock Exchange are automatically covered by the Act. Compliance requirements will depend on the operations carried out in UK. The Serious Fraud Office (SFO) with prosecute both individuals and companies for the criminal offence of giving or receiving a bribe and the corporate offence of failing to prevent bribery. Penalties are severe. Individuals can face up to 10 years in prison and an unlimited fine and companies can face unlimited fines.
And as with all legislation and regulation, there are grey areas which will preoccupy business leaders.
Hospitality should be 'reasonable' and 'proportionate.' 'Adequate procedures' should be in place to prevent bribery. Judgement will be called for in every Boardroom to establish some common view of 'reasonable' 'proportionate' and 'adequate.'
Other key questions will preoccupy Directors and their expert advisors. With new organisation structures which involve complex, global value chains, just how liable are you for the activities of other organisations you collaborate with and those of the subsidiaries you parent? What level of due diligence will be necessary in a World where 'Fractional Work' may be provided to your organisation by a multitude of individuals?
These Boardroom discussions need to establish some common ethical framework of operations; agreement on what good behaviour looks like. There has been an increased focus on the importance of aligned ethics and values in leading the delivery of business performance but equally there has been an increased focus on the importance of diversity and respecting difference.
In recruiting for diverse and balanced Boards, Nominations and Appointments Committees and their expert advisors will increasingly be exploring candidates' past behaviour in winning and doing business, in order to establish their attitudes to 'incentivising' business transactions.
Many Board agendas will have an item entitled 'Bribery Act compliance.' Does yours also have 'Board development of ethical alignment?'