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Many UK companies unprepared for the Bribery Act, according to survey

Almost 40% of UK businesses think their senior executives and board members are unprepared for the introduction of new anti-corruption laws next month, a survey has found.17 Jun 2011

Business information company Thomson Reuters carried out the survey and said that many feel that they are not properly prepared for the Bribery Act, which comes into force on 1 July.

More than 400 compliance officers, risk managers, internal auditors, lawyers and company secretaries who will be affected by the new law responded to the survey. It shows that 39% of responding businesses will either rush to meet or are unlikely to meet the 1 July deadline.

However, two thirds of the respondents are confident that they will be ready, and do not expect to see any extra costs in complying with the new regime.

Many firms are treating compliance with the Act as part of business as usual, with existing policies and systems being reviewed and updated, Thomson Reuters said in its report (registration required).

"This seems reasonable, given that implementation of the Act should simply be an extension of existing procedures and controls. However, there is no room for complacency and many firms still have a lot of work to do," said Stacey English, head of Regulatory Intelligence at Thomson Reuters Governance, Risk and Compliance in a statement.

The Bribery Act creates new obligations for companies to ensure that they have anti-corruption policies and practices in place.

Companies that do not could be liable for bribery carried out by employees, even if the company did not order that activity,
Ministry of Justice guidance (45-page / 390KB PDF) provides six essential principles for companies to follow in order to ensure compliance with the Act. One of these is the need for top-level commitment from senior management. However, the survey showed one in six of responding companies had had no discussions with the board about the new law, while a further 25% had only discussed it once.

One in three firms with an overseas parent board did not think it was necessary to discuss the new rules with their board members, the survey said.

"Complete board involvement is vital no matter where that board is based," said English. "Board members need to set the tone for behaviour in this new environment. That's what the law is asking for, and what regulators will expect."

Bribery law expert Barry Vitou of Pinsent Masons, the law firm behind OUT-LAW.COM, said that the survey's findings could be a cause for concern if they indicated similar attitudes throughout the UK.

"In our experience companies are preparing for the 1 July entry into force of the Bribery Act. Our own research indicates that the vast majority of businesses do not fear the entry into force of the new law and have a good awareness of it," he said.

"However, if this statistic is a true measure then it is worrying. We advise that all businesses should be making good faith efforts to prepare for, and comply with, the new law," he said.

For more news and information on the Bribery Act see from Pinsent Masons bribery expert Barry Vitou.