How to protect my company from corruption?

In recent weeks, the issue of corruption has gained more and more attention and importance. Accusations of corruption can damage a company's reputation. In order to actively fight corruption, it is helpful to install a whistleblower system.

Allegations of corruption not only damage a company's reputation, but can also have financial consequences. Corruption prevention expert Martin Fridl has worked out seven preventive measures that can be used to successfully protect your company against corruption.

1. background check before hiring

In principle, every person new to a company should be carefully checked beforehand. If the hiring concerns a management position, a more stringent check should be carried out once again. This is important because people in management have a high level of decision-making authority and often also a representative role. The examination of the individual should include economic, legal, tax and financial circumstances. Possible sources for the audit can be criminal records, black lists, media reports, former employers and business relationships, or research on the Internet.

2. establishment of an anti-corruption unit

By implementing an anti-corruption office (whistleblower system), companies can protect themselves even before allegations arise. The person entrusted with this task should have a recognized function and be trustworthy. It is also important that they have a direct line to the operational management level.

3 Implementation of the EU Whistleblower Directive

The directive must be implemented by December 2021 at the latest. More information on the directive and who exactly is affected can be found here. Through the Whistleblower Directive, employees are protected from dismissal, demotion and other discrimination.

4. risk assessment for contracts and business partners

Background checks should not only be conducted when hiring new personnel. Due diligence is also recommended when selecting new business relationships.

5. assessment of country risks

The expert advises caution when working with companies based in countries that are particularly prone to corruption. Blacklists from Transparency International of the World Bank serve as a guide for assessing risks. As a guide, the higher the risk, the more scrutiny.

6. Avoiding cash transactions

Probably one of the best-known measures against corruption is the elimination of cash in a company. The more steps can be traced on an account, the more difficult it is to fall under suspicion of corruption.

7. separation of duties and dual control principle

Segregation of duties is important especially with regard to financial management. A single person should not be solely responsible for all areas. When approving payments, it is advantageous to apply the four-eyes principle. With regard to transaction costs exceeding a certain amount, approval by the higher management level should also be mandatory.

Kurier 2021-07-21